Watch Out for New Small Business Laws in 2012

New small business laws and regulations take effect in 2012, and they will almost certainly affect your bottom line. One of the most significant changes will affect how your small business calculates its federal taxes , the Los Angeles Times reports. New Internal Revenue Service rules will cut by 75% the amount a small business can deduct upfront for the cost of purchasing new equipment, according to the Times . The new IRS limit for new-equipment deductions is $125,000 — down from $500,000. If you don’t like the sound of that, brace yourself for 2013. That’s when the new-equipment deduction limit will be cut even further, to $25,000. Why is this happening? Because the $500,000 deduction cap was part of the original stimulus package that’s set to expire , the website Business Insider reports. Another tax-related new small business law for 2012 aims to deter businesses from under-reporting their sales income. If your business processes more than $200,000 in credit-card payments and conducts more than 200 transactions each year, the IRS will now compare your accounting records with those kept by credit-card processing companies. Third-party payment services like PayPal are also included in this IRS cross-check, which means online businesses may feel this law’s impact the most, according to Business Insider. Aside from these IRS changes for 2012, new small business laws will also take effect in various states. For example: Employers in California will be prohibited from conducting credit checks on most job applicants, according to the Times . California is also among several states imposing heavier penalties on misclassifying employees as independent contractors. And four southern states — Louisiana, Tennessee, South Carolina, and Georgia — will now require businesses to use the federal “E-Verify” system to check an employee’s eligibility to work in the United States, CNN reports. Related Resources: In 2012, Small Businesses Can Start Fresh (Huffington Post) What is E-Verify? (U.S. Department of Homeland Security) Misclassifying Workers as Independent Contractors Carries a Steep Price (Accounting Today) Business Laws & Regulations (FindLaw)

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Watch Out for New Small Business Laws in 2012

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