Making the best decisions for your small business requires that you stay informed about new regulations.
Knowing which laws and regulations are new will help you to ensure that you adhere to the rules applicable to your industry. Also, you can find out about other benefits and opportunities to get bigger tax deductions. We’ll look at the new regulations that will affect your business in 2020.
Updates on Section 179 Tax Deductions
According to Section179.org, Section 179 is a section of the U.S. Tax Code that allows businesses to deduct in full the cost of software and equipment purchased or financed within a tax year. Businesses can deduct all of the cost from their gross revenue. The tax burden of the business is reduced and they can save a lot.
The Section 179 of the Tax Code is not a recent addition. Businesses have had access to it for years. Occasionally, however, this section of tax code is updated. In 2020, a major change was made: the total amount of deductions allowed under Section 179 increased from $1,040,000 to $1,040,000.
Two other things to consider for Section 179 deductions are:
- Depreciation bonus of 100% is available. Bonus depreciation is similar to Section 179 deductions. This is a great tool for large companies that spend more than the limit on Section 179 deductions. Small businesses that make large investments in qualified assets can take advantage of both strategies to maximize tax savings.
- Section 179 allows for the deduction of costs associated with new and used assets. Section 179 can be used by your business if you prefer to purchase used equipment because of the lower cost.
For more information on Section 179, please read our detailed article. Remember to consult with a professional before making any major tax decisions.
Minimum Wage Increases
The federal minimum wage is unchanged. The Associated Press reported that the payment floor has risen in 21 states. States with a large population, such as California, Illinois and New York saw their minimum wages go up.
The update does not only apply to small businesses that pay the minimum wage. Some jobs could be more appealing with a higher salary. Leaders of businesses need to think about how they can keep their best employees. Raisings, better benefits and promotions are all options.
To stay on top of things, keep an eye out for wage laws in your area.
New restrictions on the gig economy
California adopts many laws that become standard in other states. Recently, it restricted the use independent contractors. According to the AP, many businesses will have to hire their current contractors as employees. The AP said that many businesses may have to hire current contractors as employees.
The law is in flux. The rule is being challenged by companies that employ independent contractors. California could also expand the fields that are exempt from the rule. New laws are not always in force. For now, however, businesses will be required to comply with these rules.
If you are not based in California but one of the following situations applies, your company should be aware of the new rule.
- You hire independent contractors in California.
- Your state adopts similar legislation.
Possible New Rules
You should also check on any potential new laws. Forbes contributor Wayne Rash highlighted two important areas for many small businesses .
- Federal privacy laws. The federal government could try to standardize the rules relating to sensitive and personal information. Several states have similar laws on the books or already in place.
- Security Laws. Businesses that fail to protect customer data may face increased penalties from the federal government and certain states.
They could be implemented sooner than later. These laws may apply across the nation or just in certain states. If this happens, companies that deal with payment data or personal information may have to change their policies.
Effective funding to support change
When new regulations are imposed on small businesses, funding is an important concern. To move your business forward, you may need to inject cash into your company in order to stay productive and focused on the industry. QuickBridge can help you fund your company quickly, safely, and efficiently as you adapt to these new rules. Contact us to learn more.
