Go Zone Benefits For Businesses: The Bottom Line

by : Chris Anderson, PhD

Any good businessman will tell you that success often rests with the bottom line. That is why understanding Go Zone benefits for businesses, and the exact dollar amounts they entail, is so imperative for businesses trying to rebuild in qualified hurricane-afflicted areas. While it is important to talk with a tax and/or financial advisor to fully understand eligibility requirements, the following figures should offer business owners a basic outline of what they may or may not be eligible for.

Businesses should also make sure that their business is in a designated Go Zone. In addition, please keep in mind that the cutoff and startup dates for many incentives and benefits differ from one area to another. For example, Rita Go Zone businesses may have different cutoff and startup dates from Katrina and Wilma Go Zone businesses. So, why the bottom line is important, understanding respective cutoff dates can ensure that businesses receive their Go Zone benefits.

Increased Business Expensing allows small businesses to deduct up to $200,000 of qualifying property used in a Go Zone. In addition, the investment phase out level is now $1 million-up from $400,000. This makes it more possible for smaller businesses hit by the devastating hurricanes to recoup some of the money they are expending.

Bonus Depreciation allows businesses of all size to deduct up to 50% of a property's cost in the first year, in addition to the normal depreciation deductions that a business may be eligible for.

Net Operating Loss Carry back extension for Go Zone businesses, applicable only to the repair of existing businesses and the building of new investments, have no set dollar limit. However, keep in mind that NOL occurs when a business's allowable deductions are higher than it's gross income.

Cost for cleanup incurred by businesses can be deducted from taxes. Once again there is no specific dollar amount set on the amount that can be deducted in the cleanup or demolition of damaged properties. However, businesses cannot claim more than 50% of their incurred costs

Businesses that were operating before the Go Zone legislation was enacted can claim up to 40% of wages paid to employees through the employee assistance credit. However, there is a limit to this benefit, as employers are capped at $6,000 per employee.

In addition, employers that helped employees with lodging can, under this credit, claim up to $180 (or 40%, whichever is less) per month.

While it is good to know what types of incentives and tax breaks businesses may be eligible under Go Zone legislation, having a specific idea as to what dollar amounts they may entail can help them determine whether or not to even attempt to cash in on these benefits. In addition, businesses who may be turned off from rebuilding or relocating in hurricane ravaged areas can have a better starting point when it comes to determining financial feasibility of such an endeavor.

With the Gulf Coast Opportunity Zone legislation of 2005, the US government allocated millions of dollars in the rebuilding effort. They, like smart business owners, know that success often rests in the bottom line.

Want to learn more? Visit http://www.GoZoneOnline.com.