WorldWide Drilling Resource

Drilling Into Money Not Boring by Mark E. Battersby Last-Minute Tax Savings & Potential Pitfalls Although tax planning should be a year-round strategy, with year-end and planning a good backup - even as the tax filing deadlines approach - it is not too late to reap tax savings. Keeping in mind a drilling professional’s obligation is to pay their fair share of taxes, and not a dollar more, consider a few last-minute tax savings tips. Depreciation is an annual allowance for the wear and tear, deterioration, or obsolescence of business property such as buildings, machinery, vehicles, furni- ture, and equipment. The “extenders” bill passed late in 2015, permanently set the Section 179, first-year expensing write-off at $500,000 with a $2,010,000 (thanks to inflation) overall investment limit before phase-out. The same extenders bill also extended the 50% “bonus” depreciation write-off for equipment placed in service between 2015 and 2017, with a lower percentage kicking in for an additional two years. This means a write-off of 50% of the purchase price in the first year, plus regular depreciation for the remaining 50%. Whenever possible, repairs and maintenance expenses should be deducted immediately, rather than capitalized and de- preciated. Small businesses lacking so-called applicable financial statements (AFS) can still take advantage of a de minimis safe harbor to deduct $500 or less per purchase or per invoice. Businesses with an AFS can deduct as much as $5000 per purchase or invoice. Small businesses with gross receipts of $10 million or less can also take advantage of a safe harbor for repairs, maintenance, and improvements to eligible buildings. S Corporations - the most common entity in the United States today - are required, at least to the extent their owners per- form services for the business, to pay the owner a reasonable compensation for those services - an amount which is subject to self-employment tax. Anyone who has tried but can’t get their taxes prepared by the filing deadline can file a Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return or use an online service. Remember however, the extension pro- vides more time to file the returns, but not more time to pay the tax bill. Although taxes should never be the primary reason behind any strategy, pur- chase, or move made by a drilling busi- ness, it is never too late to plan on saving taxes. To achieve a low tax bill, either be- fore or after the return is prepared, pro- fessional assistance may be required. Mark Mark E. Battersby may be contacted via e-mail to michele@ worldwidedrillingresource.com 4< /*2'3* "& > > > > ,'< ? /2+ '6* /3+6 /3+6 ')1/3- " " !8=2+ /7843 4* 4* ')1/3- !+8 5)7 !8'3*'6* $'2:+ 9((+6 6':+2 $'2:+ 9((+6 !+'87 9((+6 $'2:+ 37+687 #6+8.'3+ $'2:+ 37+687 $'2:+ !56/3- ! ! $'2:+ 4:+6 '71+8 ? !;/:+2 ')1/3- ? !+6/+7 ? !+6/+7 ? !+6/+7 ? !+6/+7 ? !+6/+7 ? !+6/+7 < /3+6 < /3+6 < /3+6 < /3+6 < /3+6 6/)+7 !9(0+)8 "4 .'3-+ %/8.498 48/)+ !@ @ < < < < < New England Water Well Association CC Meeting and Event Services 7 Bailey Lane, Brewster NY 10509 Phone: 845-278-1892 Fax: 845-278-1899 NEWWEXPO@gmai l.com Pre-Registration $ 20 per person Spouse &Children under 16 years FREE Onsite Registration $ 25 Registrant (s) Names: Contact: Address: State/Zip Code: Phone & Fax : E-mail: Pre-Registration Deadline - March 1, 2017 Complete this form and fax or mail it along with your payment ASAP to NEWWA. Register online at www.newwassociation.org Pre-Registration NEWWA New England Water Well Expo March 10 - 11, 2017 Best Western Royal Plaza Trade Center Marlborough, Massachusetts Credit Card Type __________ Credit Card Number ________________________ Expiration Date ________________CCV (security code)_______ 33 WorldWide Drilling Resource ® FEBRUARY 2017 Natural gas is used to make several common products you may not even realize, such as: plastic, eyeglasses, food preservatives, lotion, fertilizers, fishing rods, footballs, tires, trash bags, toothpaste, and much more!