2017 Tax Changes for Small Business Owners


Don’t be caught unaware of the latest changes in tax laws and other rules that might impact your small business for 2017.

Equipment Purchases

Get a bigger tax break in 2017 if you are buying certain types of equipment.  The Section 179 deduction will be $510,000, which is an increase of $10,000 from 2016.  Small businesses can deduct up-front versus depreciating the costs of equipment like computers, vehicles, manufacturing machines and furniture, as well as some types of property.  Not eligible – air conditioning and heating equipment, land and land improvements like paved parking areas.  Learn more about Section 179 deductions and depreciation in IRS Publication 946, How to Depreciate Property – www.irs.gov.

Stand-alone HRAs Available Again

Stand-alone HRAs are back for small business owners in 2017.  Through the 21st Century Cures Act, Congress recently resurrected HRAs (“qualified small employer health reimbursement arrangements”) for employers with fewer than 50 employees.  This is a great way for small business owners who aren’t required to offer health insurance to their employees, but want to help them pay for coverage.  There is a limit of $4,950 for an individual employee or $10,000 for an employee’s family expenses.

New Filing Dates for Some Business Tax Returns

Congress passed two new laws changing the deadlines for many businesses to file important documents and returns with the IRS.

The first law created changes that affect partnerships and companies classified as C corporations:

  • Partnership returns are now due March 15. This is a change from the previous due date of April 15.
  • C Corporation returns are now due in April, changing from the previous date of March 15.

The second law passed in December requires employers to file W-2 forms and some 1099 forms with the government by January 31.  Employers were already required to give those forms to employees by January 31, but now they must also be filed with the government by that date.

Using Your Car for Business

The new mileage for business use of a car is set at 53.5 cents per mile for 2017.  That is a decrease of half a cent from 2016.  According to the Associated Press, “The government takes into consideration the fluctuating costs of operating a car when it sets the standard mileage rate each year. The rate is one of two methods for an owner to account for how much was spent on using a car for business; the second is to deduct the actual expenses for the car. An owner opting for actual expenses must calculate the percentage of miles the car is driven for business reasons, and apply that percentage to expenses like lease payments, fuel, maintenance, repairs and insurance. An owner can also deduct depreciation.”

Important to note: If business owners want to use the standard mileage rate, it must be used in the first year that it is being used for business purposes.  So either the year you acquire the care or the first year that the owner is in business.   Learn more about deducting your car for business in IRS Publication 463, Travel, Entertainment, Gift and Car Expenses.

Implement the New I-9

Starting January 17, you must use a revised form for verifying the legality of a new employee to work in the U.S.  The new Form I-9 only needs an employee’s last name and some sections have been simplified.

Additional Resources

Be sure to check the Small Business Administration for more information on filing and paying taxes - https://www.sba.gov/starting-business/filing-paying-taxes.



USA Today