Check up on a solo medical plan. Medical costs continue to skyrocket. What's a small business owner to do? Strategy: Set up a medical insurance plan just for yourself. The company can fully deduct the insurance premiums, while the value of the coverage and the actual insurance benefit payment are tax free to you. With an insured medical plan, you're not required to cover employees other than yourself. Or you can choose to cover selected employees, if you wish.
Land tax free on "Free Parking." In most cases, provided to company bigwigs are exempt from tax only if they are offered to everyone. Strategy: Rent yourself a parking space next to the office or around the block. The IRS allows companies to provide free or reduced-fee parking to its executives tax free. To qualify for this tax break, the plan must be in writing. For 2004, the maximum tax-free monthly benefit is $195 (up from $190 for 2003). Your company can also provide tax-free bus and train passes of up to $100 a month in 2004.
Work out at work tax-free. If you run a small company, it's hard to squeeze in enough exercise time during the week. Strategy: Convert office or warehouse space into an athletic facility. The tax law allows you to use a facility located on the business premises tax free, even if use is limited to the top executives—or just yourself. What's more, your spouse and children can also exercise there tax free.