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"There's a lot more business out there in small town America
than I ever dreamed of."
~ Sam Walton, Founder of Wal-Mart
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What the New Tax Law Means to Your Business
 The American Taxpayer Relief Act of 2012 (the Act), which was signed into law on January 2, 2013, helped to avert the so-called fiscal cliff. It directly impacts your 2012 return as well as your tax planning for 2013. The Act is extensive, but recognizing opportunities is vital for you to take advantage of breaks on both your 2012 and 2013 tax returns.
Tax changes for 2012
When the year ended, we still did not know the fate of dozens of tax rules that had expired at the end of 2011. The Act, with a few exceptions, extended all of the expired rules for 2012 and 2013. It also increased the dollar limit on the Sec. 179 first-year expensing deduction. Here's a list of the key breaks that may affect your 2012 return:
- Sec. 179 deduction. The dollar limit that had been allowed for 2012 was $139,000; it has been increased retroactively for all of 2012 to $500,000. This means that you can elect to expense the cost of qualifying equipment and machinery bought and placed in service before January 1, 2013, rather than depreciating the cost of a number of years. Bonus depreciation at the rate of 50% of cost is also allowed, but only for qualifying property that is new (not pre-owned).
- Research credit. If your company increased its research expenditures in 2012, it may qualify for a tax credit of up to 20% of the increase over a base amount figured from certain prior years. This is the 15th time that this credit has been extended. It was not made permanent by the Act, but was liberalized to allow it to be claimed with respect to certain expenditures in acquisition situations.
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| The lease you signed for your current space may no longer suit you. Maybe you need larger space if you're doing well. Or maybe you find an available location that is less costly than what you're obligated to pay under your current lease. Or perhaps you're going out of business and won't need your current space for the duration of the lease. If your company stops paying the rent, you personally are usually liable for the unpaid balance, as most small business owners are required to co-sign their company's leases.
What can you do?
Check for escape clauses
A lease is a binding contract. However, the terms of your lease may allow you to walk away under certain conditions.
- Early termination clause. This would let you off without any further obligation to the landlord for the balance of the rent. It usually can only be exercised after a certain period (e.g., one year) and requires some additional payment, such as rent for one or several months.
- Co-tenancy clause. If you have a store in a mall and the anchor store closes, you may be entitled to a rent cut or even to the cancellation of your lease.
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Preparing Yourself to Talk to the Media
| As a business owner, you may want or need to speak with reporters for old (print, radio, and TV) or new (web-based or mobile) media. For example, an incident on your premises or in your local area may attract media attention, or maybe you've developed a new product that you want to tell the world about. Are you prepared?
Take the time to hone the skills you'll need before your next interview.
To help you, I've interviewed Brad Phillips, the author of The Media Training Bible: 101 Things You Absolutely, Positively Need to Know Before Your Next Interview.
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Our Readers Ask
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Q: Can I take a standard deduction amount for my home office?
A: Not for your 2012 return. However, the IRS has created a safe harbor amount that can be deducted for a home office instead of actual costs that is effective on January 1, 2013. The safe harbor amount is $5 per square foot up to a maximum of 300 square feet (top write-off is $1,500). You still must use the space in your home regularly and exclusively for business and meet other home office deduction rules. For example, the safe harbor amount cannot exceed income from the home office, so if your business runs at a loss for the year, no deduction is allowed.
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Book Review
Human Resources Kit for Dummies, 3rd Edition
Max Messmer ~ Wiley ~ Paperback: $34.99
 Once you hire your first employee, you need to be concerned about human resources in order to do things right and avoid problems. This book shows you, in the simplest terms, what you need to know about the hiring process as well as how to retain and train employees. It also covers legal issues on hiring and managing your staff.
As with all Dummies books, Messmer's is easy to understand; technical terms are defined. The book is peppered with checklists and resources to help you meet your HR responsibilities.
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It's a Fact!
Your State's Business Tax Climate
Is it good or bad?
The best are Wyoming, South Dakota, Nevada, Alaska, and Florida.
The worst: New York, New Jersey, California, Vermont, and Rhode Island.
Source:
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Featured Podcast
from
Build Your Business Radio
Beth Goldstein,
discussing what it means to be lucky in business as she describes in her book:
Lucky by Design
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A free online supplement, including the latest changes by Congress,
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