You can save hundreds or even thousands of dollars through certain “tax elections” on the 2011 return you file by April 17. These choices often involve tax return comparisons.
What sort of elections are we talking about? Here are five prime examples.
1. Secure fast business write-offs. Due to recent tax law changes, many small business owners can deduct the full amount of business property they placed in service in 2011.
Strategy: First, elect the maximumfor qualified property. If any cost remains, you can apply the bonus depreciation tax break.
For 2011, the maximumdeduction is $500,000, with a $2 million phaseout threshold.
But your Section 179 deduction is limited to your taxable income from your business activities. If you can’t deduct the full cost of property under the Section 179 rules, you can claim 100% bonus depreciation on the balance if the property is new (not used).
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