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Uncertainty for Restaurant Owners in 2015

Uncertainty for Restaurant Owners in 2015

2015 is starting off well for the American consumers paying the lowest prices in the gas pumps.  U.S. gas prices have fallen more than $1 per gallon over the last 12 months to a national average of $2.06, according to AAA.  The U.S. Energy Information Administration is predicting that the average American household will see spending at the pump decrease by $750 this year.  Low gas prices are helping businesses as well.  Many restaurant owners and market analysts believe restaurant sales are up due to the decreased fuel prices.  The consumers have more money to spend on discretionary items. (See article “Restaurant Stocks Rise on Lower Gas Prices” by Dominic Chu, Markets Reporter for CNBC.)

However, 2015 starts off with many uncertainties for business owners who are waiting to see what legislation President Obama and Congress will pass this year.  Four tax provisions were renewed at the end of 2014 which gave restaurants and other businesses some tax relief for tax year 2014.  These tax extenders expired on January 1st, and again there is uncertainty if Washington will extend these tax provisions for 2015 and future year

  • Section 179 Expensing:  businesses can expense up to $500,000 of new equipment, software, and qualified real property bought in 2014 if they financed less than $2 million of their purchases.  If this provision is not renewed for 2015, the maximum deduction allowed will revert to $25,000.
  • 15-year Depreciation:  Restaurants and retail businesses can depreciate certain improvements and new construction over 15 years.  If this provision is not renewed in 2015, the depreciation period will return to 39.5 years.
  • Work Opportunity Tax Credit:  Businesses can claim tax credits of $2,400 to $5,600 for hiring employees from demographic groups who have a hard time finding employme
  • Enhanced Charitable Food Donation Deduction Restaurants and grocers donating food to certain charities can deduct the basis (cost) of the food donated plus half the profit it would have earned if sold.  The donation may not exceed two times the cost or basis of the item.  It this provision is not renewed in 2015, only the basis of the food items will be deductible.


Other legislation that will have a direct impact on restaurant owners and other employers:

  • The Affordable Care Act (ACA)’s mandate for employers to provide health care coverage for full-time employees kicked in this year.  Employers with at least 100 Full-time Equivalent employees have to provide coverage to at least 70% of their full-time employees. The ACA defines full-time as working 30 hours a week or more.  The U.S House of Representatives just passed a proposal changing the definition of full-time to 40 hours a week (“Save American Workers Act”), but President Obama has already indicated that he will veto any legislation changing the current definition of full-time under the ACA.
  •  Increase in the Minimum Wage: The President reiterated in his State of the Union Address his desire to see an increase in the minimum wage.  Employers will have to decide on how to cover the additional increase in labor cost.
  •  Paid Sick Leave: In the State of the Union Address President Obama also urged Congress to pass legislation mandating paid sick leave for employees.  He supports a proposed bill, “The Healthy Families Act”, which requires employers who employ 15 or more employees to allow for up to a week of paid sick leave for their workers.


Allen & Company, PC  - a CPA firm serving Kennesaw, Marietta, Acworth, Woodstock and north Atlanta.  Providing accounting, financial statement audit, taxation, and advisory services for individuals and businesses.  Extensive experience working with franchised restaurants and other franchised businesses.