For 2011 the IRS has some significant tax incentives for businesses, especially restaurants:
Depreciation: The bonus depreciation for equipment is 100% of the cost. If you make leasehold improvements, they qualify for Sec 179 deduction which can be as great as $500,000.
Tax Credits: Research and development. Examples of qualifying projects – self created software or creation of process, like those used in a brewery.
HIRE Act credits: If you employed a new person after 2/3/10 and before 12/31/10, you were entitled to a specific 2010 credit. However, if you continued to employ that same person for 52 weeks, you would be entitled to a $1,000 per employee non refundable credit on your 2011 tax return.
FICA: For 2011 only, the employer’s tax rate has been reduced by 2% from 6.2% to 4.2%.
Employee Meals: If you provide meals to your employees before, during or after work hours, the meals are generally provided for the convenience of the employer and: 1) Are not considered taxable wages and 2) Are 100% deductible by the restaurant owner.
Charitable Donation of Food Inventory: For 2011, if you have excess wholesale food inventory, it may qualify for an enhanced charitable deduction. The deduction is generally the tax basis of the property plus 50% of the property’s appreciation or twice the tax basis of the property.
Some of these are straight forward and some may need further clarification. Please contact us with any questions that you might have.