Busy entrepreneurs: It’s time to talk taxes. This year a few changes are coming, and the news is a mixed bag for small business owners.
Here’s the good news. If you incur home office expenses, the mathematical formula for calculating the deduction has been simplified. Home-based entrepreneurs can choose to deduct $5 per square foot for business usage up to a maximum of $1,500.
On the personal-taxation side, standard deductions for the 2014 tax year are a bit more generous. The standard deduction for a married couple filing a joint return will increase to $12,400. That’s sure to encourage entrepreneurs, whether they work at home or commute to an office.
According to the latest from the IRS, those couples with combined incomes in excess of $450,000 will see a tax-rate increase to 39.6 percent. The rest of us can breathe a sigh of relief … at least for now. Most pundits expect those mile-high deficits will eventually pressure U.S. politicians to raise taxes.
Although many politicians will choke and fume over the prospect — as we saw in the political gridlock that shuttered the government for weeks — Americans will likely face international pressure to hold down spending before too long. Until then, expert tax preparation will give small business owners a means to ensuring they don’t pay more taxes than the law requires.
The bottom line for taxpayers: Don’t miss a single tax deduction, when you file your 2013 tax return.