Small Business Owners: Tax Help from the IRS
The IRS offers many income tax incentives and deductions to small business owners. Among these provisions are deductions for health insurance, asset depreciation and credits for those affected by the Alternative Minimum Tax (AMT). Business owners who take advantage of this tax help for small business from the IRS may be able to significantly reduce their tax liability. 
Health Care Tax Credit
Companies that employ 25 or fewer workers and pay at least half of their employees' health insurance costs may be eligible for the health care tax credit. To qualify employee wages must fall between $25,000 and $50,000 annually. Through 2013 company owners can claim up to 35 percent of their costs as a tax credit on their business tax return.
Deduction for Self-Employed Health Insurance
A recent change in the tax law allows self-employed taxpayers to deduct a portion of their own health insurance costs from both their business income and their self-employment taxes. To claim this deduction, taxpayers must be paying for their own insurance costs.
Section 179 Depreciation Deduction
The Section 179 depreciation provision allows taxpayers to write off the entire cost of equipment and computer software in one tax year rather than depreciating it gradually over the course of its useful life. Depending on the purchase, this deduction can greatly help to offset business income and reduce tax. The Section 179 depreciation deduction can be used on purchases up to $500,000, but the provision began being phased out in early 2012. In order to claim a Section 179 deduction a business must have a profit for the year.
Additional Deduction for Bonus Depreciation
Bonus depreciation is a tax provision that enables business owners to write off depreciation even if the business reported a loss. Typically, depreciation can only be used as a business expense to offset income, but by claiming this deduction, taxpayers can claim these costs even if they had no taxable income that year. This option is only valid on new purchases of equipment or other assets.
Auto Depreciation
The IRS has expanded the first-year depreciation allowances for cars, trucks, and other vehicles that are placed into service for business use. Taxpayers should consult the IRS guidelines to learn exactly how much they can deduct for their business vehicles.
General Business Credit
In 2010 the IRS allowed business owners who were affected by the Alternative Minimum Tax to claim their General Business Credit deductions. Prior to that year taxpayers who were subject to AMT were disallowed from these deductions.
The IRS has extended several credits and deductions that can provide tax help for small business owners. Taxpayers who need assistance navigating the tax guidelines should seek the advice of a qualified tax resolution professional.
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