The year 2015 also brings with it some change to sections of the Code that will affect, in particular, small and medium-sized businesses. While none of these changes may seem major, it is important to stay informed of such updates in order to avoid (or to take advantage of) any potential pitfalls (or opportunities).
First, the IRS has announced a change in the Business Standard Mileage Reimbursement Rate (the “BSMRR”) for 2015. This change comes in the form of a per mile increase to 57.5 cents, in contrast to last year’s reimbursement rate of 56 cents per mile.1 Fortunately, this change comes at a time when gas prices have plummeted across the US, which turns the BSMRR increase into a small windfall for some taxpayers.
Second, the IRS has expanded the coverage of the Small Employer Health Insurance Credit. Although the bulk of the credit remains the same, the dollar amount used to determine whether an employer’s average employee salary qualifies it as an “eligible small employer” (one of several criteria that must be met in order to qualify for the credit) has been increased from $25,000 to $25,800.2 This increase means that certain employers who may not have previously been eligible for this credit may now be able to take advantage of it.
Third, the IRS has increased the allowed Exclusion from Wages of Transportation Benefits, which are provided by employers, to: $130 monthly for transportation in a commuter vehicle or for any transit pass, and $250 monthly for qualified parking. These figures are up from $100 and $175, respectively, in 2014.3
Fourth, there have been changes to the Code that will affect how employers compute payroll taxes. The Social Security Administration has increased the amount of earnings subject to social security tax to $118,500, from $117,000 in 2014.4 Employers should take this change into account immediately and adjust their payroll/withholding systems.
Lastly, there is the annual expiration of certain benefits, which are usually extended before the end of the year. One major change is the decrease, from $500,000 to $25,000, of the allowable deduction for purchases of certain qualifying property under Code §179, as well as the elimination of bonus depreciation that was also offered under this Code section.5 These changes could cause a substantial increase in a business’s tax liability if the $25,000 figure is not increased and the bonus depreciation allowance is not reinstated.
While these changes may seem insignificant, you should consult a lawyer or qualified tax professional to determine how they may affect you, or how you may be able to take advantage of them.
For questions or assistance regarding the 2015 Corporate Tax Changes, please contact us at (571)-595-2836 or admin@bjkanglaw.com
1 Notice 2014-79.
2 26 U.S.C. §45R; IRS Pub. 15-B (2015).
3 Id.
4 2015 Social Security Changes, http://www.ssa.gov/news/press/factsheets/colafacts2015.html.
5 H.R. 5771-8.
First, the IRS has announced a change in the Business Standard Mileage Reimbursement Rate (the “BSMRR”) for 2015. This change comes in the form of a per mile increase to 57.5 cents, in contrast to last year’s reimbursement rate of 56 cents per mile.1 Fortunately, this change comes at a time when gas prices have plummeted across the US, which turns the BSMRR increase into a small windfall for some taxpayers.
Second, the IRS has expanded the coverage of the Small Employer Health Insurance Credit. Although the bulk of the credit remains the same, the dollar amount used to determine whether an employer’s average employee salary qualifies it as an “eligible small employer” (one of several criteria that must be met in order to qualify for the credit) has been increased from $25,000 to $25,800.2 This increase means that certain employers who may not have previously been eligible for this credit may now be able to take advantage of it.
Third, the IRS has increased the allowed Exclusion from Wages of Transportation Benefits, which are provided by employers, to: $130 monthly for transportation in a commuter vehicle or for any transit pass, and $250 monthly for qualified parking. These figures are up from $100 and $175, respectively, in 2014.3
Fourth, there have been changes to the Code that will affect how employers compute payroll taxes. The Social Security Administration has increased the amount of earnings subject to social security tax to $118,500, from $117,000 in 2014.4 Employers should take this change into account immediately and adjust their payroll/withholding systems.
Lastly, there is the annual expiration of certain benefits, which are usually extended before the end of the year. One major change is the decrease, from $500,000 to $25,000, of the allowable deduction for purchases of certain qualifying property under Code §179, as well as the elimination of bonus depreciation that was also offered under this Code section.5 These changes could cause a substantial increase in a business’s tax liability if the $25,000 figure is not increased and the bonus depreciation allowance is not reinstated.
While these changes may seem insignificant, you should consult a lawyer or qualified tax professional to determine how they may affect you, or how you may be able to take advantage of them.
For questions or assistance regarding the 2015 Corporate Tax Changes, please contact us at (571)-595-2836 or admin@bjkanglaw.com
1 Notice 2014-79.
2 26 U.S.C. §45R; IRS Pub. 15-B (2015).
3 Id.
4 2015 Social Security Changes, http://www.ssa.gov/news/press/factsheets/colafacts2015.html.
5 H.R. 5771-8.
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