Although your business doesn’t have quite the same flexibility at year-end as individual filers, you still can reduce your 2007 tax bill. Here are eight top techniques usually available to small business owners.
1. Speed up write-offs for equipment
Normally, it takes years to fully recoup the cost of business equipment through depreciation deductions. But you have a special tax weapon in your arsenal: the Sec. 179 “expensing” deduction.
Under Sec. 179, you can write off, within generous limits, the full cost of equipment in the year it is placed in service. The deduction is reduced on a dollar-for-dollar basis for purchases above an annual threshold.
Strategy: Go to town this year. The new small business law increased the maximum Sec. 179 deduction for 2007 to $125,000. (The limit was previously scheduled to be $112,000.) Moreover, the phaseout threshold increases from $450,000 to $500,000.
Also, note that depreciation deduct...(register to read more)