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National Restaurant Association - SBA to operators: Get tax credits, deductions now

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SBA to operators: Get tax credits, deductions now

Although the end of the year is near, there are still some business tax credits and deductions restaurateurs and other small business owners can take advantage of, the U.S. Small Business Administration reported.

According to the SBA, tax benefits are available on equipment purchases made before the end of the year, under the American Recovery and Reinvestment Act, found in Section 179 of the tax code. Section 179 allows full deduction of the cost of assets, such as computers, certain business software, furniture, vehicles and manufacturing equipment in the year of purchase, but up to a certain amount. For example:

The limit this year for any piece of equipment is now $139,000, as long as total purchases do not exceed $560,000. This means that if you buy or finance a piece of new or used equipment, you can deduct the full purchase price (up to $139,000) from your gross income.

For expenditures above $560,000, the amount you can deduct is reduced by $1 dollar for each dollar over that figure.

A bonus depreciation provision allows you to deduct 50 percent of the cost of the cost of certain property after you've taken the Section 179 deduction and in addition to the standard depreciation deduction.

"Review your inventory and equipment," the SBA advised in a written statement. "If you find you need to replace obsolete or aging assets, this may be the time to do so. Talk to your tax advisor or accountant about qualifying your purchases."

The SBA added that in order to claim the deduction, the equipment must be in place on or before Dec. 31.

In addition, business operators who hire veterans under the Vow to Hire Heroes Act of 2011 also are eligible for tax credits as well.

Under the law, employers who hire a veteran who has been unemployed for at least four weeks can claim a credit for up to 40 percent of the first $6,000 in wages. If the veteran has been unemployed for at least six months, the credit goes up to 40 percent of the first $14,000 in wages.

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