Four-Tax-Codes-All-Car-Wash-Owners-Need-to-Know

As the owner of a car wash business, one of the most complex issues that you need to take care of are your taxes. Some people consider the IRS to be a sworn enemy, but if you know how to take advantage of tax codes and regulations that are designed to help entrepreneurs, submitting a tax return shouldn’t be a source of contention.

In fact, you can save quite a bit of money when you use the correct tax codes and strategies when filing for your business. As a business owner and entrepreneur, it’s up to you to maximize profits, and tax season should never be overlooked as an opportunity to reduce operating costs.

Section 179 Expensing

The “Tax Increase Prevention Act of 2014” consists of dozens of tax breaks that small businesses can take advantage of to reduce costs. One of these breaks takes the form of the Section 179 expensing activities. Small business owners are entitled to deduct up to $500,000 of depreciating assets that last less than 20 years.

Furniture, car wash equipment, computers and business vehicles are included in this tax break. Depending on your business, you may be eligible for the bonus depreciation of 50 percent for capital purchases in the first year.

Employee Vs. Independent Contractor

Declaring all of your employees as independent contractors may be tempting to avoid up-front costs, but you can get into trouble if you inappropriately label full-time employees as independent contractors for tax purposes. The difference between a W-2 employee and 1099 contractor is fairly straightforward. If you need to train the employee and direct them to do their task, there’s a good chance that they’re a W-2. If you hire somebody to do work for you and they do so without your direct supervision, they’re probably an independent contractor.

Cost of Running a Small Business

The U.S. tax code is set up to help small businesses, especially startups, by allowing for a $5,000 deduction when it comes to the day-to-day running of the business. This includes advertising costs, market research and employee training. The only catch is that if a particular asset lasts longer than a year, you must calculate depreciation of that item. Retaining documentation and receipts are a must for this type of tax code discount.

Health Care Credit

Employers who help their workers obtain healthcare under the Affordable Care Act may be eligible for a tax credit worth 50% of the cost of the program. In order to qualify for this discount, you cannot claim it for two consecutive years and you must cover at least 50 percent of the premiums. You also cannot claim this benefit if you have more than 25 employees with an average salary of $50,000.

Looking to Buy Effective Car Wash Equipment?  

In today’s competitive world, having effective car wash equipment can mean the difference between success and failure. If you want to drive business away from your competitors, you’ll need to invest in a quality car wash system. This is where you can rely on Ryko to help you succeed.

Over the years, we have installed car wash equipment for hundreds of new entrepreneurs and experienced owners across North America, and we can help you bring more profit to your business. We will find the right solutions to fit your business. Contact us today for more information.