There was a great deal of posturing and little explaining during recent fiscal negotiations, so it’s understandable if you couldn’t make out what the negotiations mean for small business owners. Indeed, small business owners (SBOs) risked losing some tax incentives that had been in place during the fiscal cliff fight. Fortunately, many important ones survived, and you have every opportunity to take advantage of them in your first year of business and beyond. There’s money on the table. Here’s a quick guide to understanding the tax breaks you can claim.

  • Writing off start-up costs. It may have been hard to tell during the squabbles in Washington, but the Obama administration’s Small Business Jobs Act did one very concrete thing: It doubled the amount of money small business owners could deduct as start-up costs. SBOs can now write off $10,000 (formerly $5,000) in costs associated with opening your doors (or website) to the public. There is no expiration date for this tax break.
  • The 179 deduction. The very popular Section 179 deduction gives small businesses (with capital expenses under $2 million) the opportunity to deduct up to $500,000 in expenses. This incentive applies to both new and used equipment, as long as it was placed in service during the tax year in question. It encourages you to go “all in” in the early stages of your business. For now, it is in place until the end of 2013.
  • Bonus depreciation for purchases. Every business needs furniture, machines, and other types of equipment to compete. Bonus depreciation allows you to write off as much as 50 percent of an investment ahead of the standard depreciation schedule. When you are struggling to come up with the money for desperately needed equipment, crunch the numbers on the benefits you’ll receive at tax time.
  • Encouraging investments. If you are looking for angel investors, tax credit extensions have made it more attractive to put capital into a start-up company like your own. Angel investors can write off as much as 50 percent of capital gains in companies getting off the ground. Although this tax break doesn’t affect you directly, it’s something you can use to encourage investment in your business.
  • The work opportunity credit. There are tax credits available for employers who hire veterans, but the list goes well beyond ex-U.S. service members. Food stamp recipients, summer youth employees, and seniors getting Social Security benefits all fall under the banner of this designated group, and the tax breaks will vary according to the type of employee you hire.
  • The R&D credit. Known as the “Research & Experimentation” (or “Development”) credit, this entry qualifies as one of the tax incentives small business owners understand the least. If you are redesigning a product, improving the overall flow of your business, or investing back in your business in any way, you might qualify for this tax credit. It isn’t all about laboratories and big businesses. The smallest shops have a shot, too.
  • New cell phone inclusions. One of the most popular additions to the deduction list came when the IRS lightened the restrictions on the business use of cell phones. Considering that this expense might be one of the first you see as important for your employees, it’s a welcomed tax break to have.

Small business owners should remember there are tax incentives out there, and they’re in place to help you get started. Talk to your tax advisor about claiming every possible benefit on the table.