- Thanks to the Small Business Jobs Act signed in 2010, business owners, including restaurant owners, are now entitled to deductions of up to $500,000, twice the amount previously allowed. Items deducted must qualify under section 179 and only pertain to restaurant property that was purchased and in active service in 2010 and 2011.
- Also new in 2010 was the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act. While this act was primarily designed to help employees and families, it does state that business owners can expense 100 percent of qualifying investments made in 2011. The Extension of Bonus Depreciation section of the act also states that a first-year bonus depreciation deduction of 50 percent is provided for property put in service between Jan 1, 2012 and December 31, 2012.
- Restaurant owners can also receive a tax break by hiring workers that were previously unemployed. Thanks to the Hiring Incentives to Restore Employment (HIRE) Act of 2010, restaurant owners that hired workers after the act was signed were exempt from paying the normal 6.2 percent of the social security tax for the employees wages through December 31, 2010. If the restaurant owner continues to employ the worker for 52 consecutive weeks, he may also receive a tax credit of 6.2 percent of the wages paid up to a maximum of $1,000 per new worker.
- Under section 195(b), restaurant owners that open the business anytime after December 31, 2009 are entitled to a $10,000 tax deduction on any qualifying start-up costs, such as equipment, furnishings, structural upgrades and maintenance. This is also twice the deductible amount from previous years. For restaurants that have been in business for a while, they may carry back general credits up to five years, up from just one year previously. However, it is only available to restaurant owners whose company stock is not publicly traded and has earned less than $50 million in annual gross revenue during the previous three years.
- Advertisement -
- Advertisement -