ATR Supports Permanent Tax Relief for Small Employers
The U.S. House this week will consider three bills which would permanently cut taxes on small employers. ATR is very supportive of each of these bills, and encourages pro-taxpayer Members of Congress to vote for them.
H.R. 4457, "America's Small Business Tax Relief Act of 2014," is sponsored by Congressman Pat Tiberi (R-Ohio). It would make permanent a tax provision allowing small employers to expense (immediately deduct from taxable profit) up to $500,000 of equipment purchases per year. If current law is not changed, small businesses can only expense $25,000 of purchases for things like computers, office furniture, manufacturing equipment, etc. The rest must be subject to a slow, multi-year deduction process known as "depreciation."
H.R. 4453 and H.R. 4454 are both sponsored by Congressman Dave Reichert (R-Wash.) These are two permanent tax cuts which make tax compliance easier for S-corporations, a common tax form for medium-sized, mature businesses. According to the IRS, there are 4.1 million S-corps with 7 million owners (S-corp owners pay the business' taxes on their individual 1040s). The permanent law changes involve built-in gains and basis adjustments for charitable contributions.