Issue link: http://palletcentral.uberflip.com/i/666889
palletcentral.com PalletCentral • March-April 2016 37 In 2016, the per-item-or-invoice deduction limit is $2,500. You must make an election to use this safe harbor each year you want it. Note that these rules apply to your federal income taxes. There may be different rules for your state income taxes. Your People Planning on hiring additional workers in 2016? Don't ignore the tax impact of your decisions. For example, if you currently have fewer than 50 full-time and full-time equivalent employees, you aren't subject to the employer mandate under the Affordable Care Act, which requires you to provide minimum essential health coverage to full-timers or pay a penalty. Determine whether new hiring will put you over the threshold to make you an applicable large employer (ALE). As such, you not only have to play-or-pay when it comes to health coverage, but you also have to send annual information returns (Form 1095-C) to employees explaining the extent of their coverage for the year. Also look for tax breaks that defray the cost of hiring. For example, the work opportunity credit gives you a dollar-for-dollar reduction of your taxes up to a set amount. There are a number of categories of employees and hiring someone from any of these categories produces some credit; the amount of the credit depends on the category. For 2016, there is a new targeted group for long-term unemployed individuals. These are people who've been unemployed for at least 27 weeks. To claim the credit, the worker must be certified by your state's workforce agency. This is done by submitting IRS Form 8850 (https://www.irs.gov/pub/irs- pdf/f8850.pdf), signed by you and the worker, to the agency within 28 days of the start of employment. (Note: This form has not yet been revised for 2016 to reflect the new targeted group.) Your Facilities Are you thinking about making improvements to your facilities? Becoming more energy efficient? Again, tax breaks can help. Here are some to consider: • Leasehold improvements. If you lease your facilities and make internal improvements, you don't have to depreciate the cost as you would for the purchase of the building itself. You can accelerate your write-offs using first-year expensing and bonus depreciation. Any costs not deducted with these write-offs can be deducted ratably over 15 years. • Energy-efficient buildings. If you make improvements so that your building meets certain energy standards, you can deduct $1.80 per square foot. Find details from Energy.gov (http://energy.gov/savings/energy-efficient-commercial-buildings- tax-deduction). Your Vehicles Do you need a new car or truck this year? When buying or leasing, factor in tax results. For example, if leasing a vehicle, you can deduct lease payments (although there is some deduction offset for leasing expensive cars, light trucks, or vans). If purchasing the vehicle, you can write off the purchase price. However, there are dollar limits on annual deductions for passenger cars, light trucks, and vans. If you're trading in an old vehicle for a new one, the tax basis of the new vehicle (the amount that can be written off) is the basis of the old vehicle (which may be zero), plus any additional amount you pay. You may be eligible for a special tax credit for certain energy- efficient strategies you use for your vehicles. Here are a few examples: • Alternative fuel vehicle refueling property credit. If you buy