Congress has given a holiday present to McDonald's Owner/Operators.
This present has long-lasting value – Congress on Friday voted to make permanent more than 20 tax benefits and also extended many other important benefits through 2016 or 2019.
This package of tax benefits, known as tax extenders, doesn't leave much tax planning time for 2015, however, Friday's vote will allow for tremendous tax planning opportunities in the future.
There are many tax benefits that will especially help McDonald's Owner/Operators, including major depreciation changes that can help finance rebuilds and major renovation projects, as well as an extension of the Work Opportunity Tax Credit through 2019.
Here are some of the key benefits for McDonald's Owner/Operators:
- The bill makes permanent a provision that allows restaurateurs to depreciate remodeling and other improvements to their eateries over 15 years rather than the previous standard of 39 years.
- A separate provision extended for five years allows 50 percent of the cost of improvements to be written off under Bonus Depreciation. The 50 percent level is reduced to 40 percent in 2018 and to 30 percent in 2019.
- Section 179 expensing, which determines the amount of an investment a small business is allowed to write off entirely in the first year rather than being depreciated over multiple years, would be made permanent at $500,000, indexed for inflation.
- For tax years beginning after Dec. 31, 2015, air conditioning and heating units are eligible for expensing. In prior years, they were specifically excluded.
- The Work Opportunity Tax Credit, which gives retailers a tax incentive to hire the disabled, welfare recipients and other economically challenged individuals, would be renewed for five years. There also is now an additional enhancement for hiring the long-term unemployed.
With these tax benefits, you can better plan for your reinvestments and be certain of the tax benefit generated.
So in short, the holidays have come early for McDonald's Owner/Operators (and accountants!). We look forward to investigating which of these many tax benefits can help your business flourish in 2016 and in many years to come.
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