2016 tax filings bring many changes to the business tax code

Today is possibly the most dreaded day of the year for those who need to file corporate taxes. It is September 15. The last day that after extensions, that you can file your corporate taxes without fear of penalty, unless you can show just cause. It is a busy month and an especially a busy week for us in the finance, accounting and tax area. It is likely one of late nights, gallons of coffee and paper flying around the office. 2016 tax filings bring many changes to the business tax code.

A few of the many changes include:

-PATH Act (Protecting American from Tax Hikes) changes –

-Under this act, owners can now deduct money for improvements made to certain commercial properties, that in the past were not eligible. Many of these changes impact individuals, but also impact small business owners in many ways.

-Section 179 deduction was extended. Allowing owners to deduct up to $500,000 of the cost of property used for business purposes more than half of the time. (Note, in any given year, only purchases up to $2 Million of commercial property can qualify for Section 179).

-The authorization also extends the bonus depreciation laws that
expired in 2014. Bonus depreciation allows business owners to deduct
large portion of the cost of a new long-term asset. From 2015-2017,
the depreciation percentage will be 50%, but this value may drop to
40% in 2018 and 30% in 2019.

-Healthcare tax code related changes –
Large companies employing 50 or more full time workers are now
required to offer healthcare. Not only can business that fail to
provide employees with healthcare be subject to penalties, but
small businesses that cover 50% or more or premium cost and employ
fewer than 25 workers might also qualify for help in the form of
the Small Business Health Care Tax Credit.

-Tennessee changes
-Identified additional circumstances under which the Department of
Revenue may waive penalties for delinquent franchise and excise
taxes, and updated the formula for calculating quarterly franchise
and excise taxes.
-Decreased the penalties for deficient/delinquent estimated
franchise and excise tax from 5% to 2%.

Hopefully you have managed to get your corporate taxes filed by today’s deadline. We will definitely enjoy waking up on the 16th , knowing the 15th is behind us. For more information on these tax code changes, any other tax code change, tax issue(s), or for accounting and finance assistance, please do not hesitate to reach out to us.