The recently enacted Consolidated Appropriations Act offers valuable extensions and expansions of tax breaks for small-business owners. Below is a summary of the most relevant provisions to consider as you plan for the years ahead:
✅ Business Expense Deductions & Credits
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100% Deduction for Business Meals
Business meals (dine-in or takeout) provided by restaurants are fully deductible in 2021 and 2022. -
Work Opportunity Tax Credit (WOTC)
Extended through 2025 for employers hiring individuals from 10 targeted groups. -
New Markets Tax Credit
Qualifying investments may claim a 39% credit through 2025. -
Empowerment Zone Incentives
Extended through 2025, though:-
Enhanced first-year depreciation
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Capital gains tax deferral
are both eliminated beginning in 2021.
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Section 127 Student Loan Assistance
Employers may pay up to $5,250 toward employee student loans (principal + interest) tax-free through 2025.
🏘️ Real Estate, Depreciation & Property Provisions
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30-Year Depreciation (Elective)
For residential rental property placed in service before 2018 (previously depreciated over 40 years), businesses may now use a 30-year straight-line schedule if they opted out of TCJA interest limitations. -
Motorsports Complex Depreciation
Seven-year recovery period extended through 2025. -
Film, TV & Theater Production Write-Offs
Qualified productions starting before 2025 are eligible for:-
$15M first-year write-off limit
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$20M limit in designated disadvantaged zones
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Racehorse Depreciation
Racehorses two years old or younger placed in service in 2021 qualify for 3-year depreciation.
🌱 Energy Efficiency & Clean Tech Incentives
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Commercial Building Energy Deduction
The per-square-foot deduction is now permanent:-
$1.80/sq. ft. for energy-efficient improvements
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$0.60/sq. ft. for partial qualifications
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Residential Energy-Efficient Home Credit
Homebuilders may claim:-
$1,000 or $2,000 per qualifying home through 2021
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EV Refueling Property Credit
Businesses installing non-hydrogen alternative-fuel stations (e.g., electric vehicle chargers) can claim up to 30% of the installation cost through 2021. -
Hydrogen-Powered Vehicle Credit
Businesses may claim up to:-
$4,000 to $40,000 for qualifying hydrogen-fueled vehicles through 2021.
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📉 Disaster Relief, Loans & Tax Treatment
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SBA EIDL Advances & Loan Assistance
These funds are:-
Non-taxable
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Do not reduce tax attributes (like NOLs or basis)
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Farmer-Specific NOL Carryback Adjustment
Farmers may elect a 2-year NOL carryback (instead of 5 years) retroactively, as if it had been in the original CARES Act.
📞 Need Help Navigating These Opportunities?
We can help you determine which tax breaks apply to your business and how to take full advantage of them.
Contact our office at 561-995-0064 to schedule a consultation.