The business tax laws in US have been modified and this is a good news for the small business owners of the country. The business taxes are of several types. These are the Corporate Franchise Tax, Value Added Tax, Employment Tax, Gross-Receipt Tax and Excise Tax.
There are some additional taxes that are imposed on some of the particular businesses. The IRS is responsible for imposing and collecting the business taxes. Several changes are introduced in the business tax laws.
Some of these positive changes that are about to be imposed in 2007 are as follows:
Section 179: The business tax laws regarding this section have been changed and the business-owners are permitted to raise the annual investment limit to $500,000. On the other hand, maximum amount of expense regarding the equipments are increased to 125,000. The investment limit in the Gulf Opportunity Zone has been increased to $1,100,000.
Self Employment Tax: The tax rate of 15.3% remained unchanged but the limit has been increased to 97,500. Previously it was 94,200. The 15,3% tax is deducted from the first 97,500. After this particular amount, if there is anything then 2.9% Medicare tax is deductible from that amount.
Business Standard Mileage Rate: The mileage rate has been increased to 48.5 cents per mile. Apart from these, the parking and tolls related to business activities are also deductible.
Social Security Tax: This is also a part of the business taxes and the business tax laws related to this section have been modified. According to new business tax laws, the maximum amount on which the tax is applicable is increased to 97,500 and the rate is 7.65%. Any amount that is above the limit is subject to Medicare tax at 1.45% rate.
Domestic Production Activities: The business tax laws that are related to the domestic production are modified. According to the new rules, the deduction applicable on the domestic production activities has been raised to 6% of the net income caused by the domestic production activities.
Last Updated on : 29th July 2013