Small Business Tax Strategies

Is there a maximum amount that any employee can be paid based on the idea of reasonable compensation with interest?

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What are the per diem deductions for merchant seamen?

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What triggers the wash-sale rule?

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What is the policy on taxing foreign citizens who work abroad for U.S. firms.

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If your company expects to owe less than $1,000 in employment taxes annually, you’ll be able to file the new Form 944 (Employer’s Annual Federal Tax Return) once each year with your annual return, rather than filing Form 941 (Employer’s Quarterly Federal Tax Return) four times a year.

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Even some taxpayers with complex returns do the “shoebox drop” when meeting with their tax preparer during filing season. But simply handing your preparer a pile of receipts and records will cost you several ways.

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While some view the home-office deduction as audit bait, you’ll withstand any IRS scrutiny if you know and follow the home-office deduction rules. In this Special Report, we’ll explain those rules in plain English and show you how to earn bigger and better deductions without getting off the living room couch.

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Many people contribute to their IRAs at the tax return deadline. But why wait?

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If one of your parents or in-laws is suffering a financial pinch, you might chip in with part of the rent or some other expense. In return, grandma or grandpa happily volunteers to watch your children after school while you work. Unfortunately, you can’t claim a dependency exemption for this trade-off if your relative’s earnings rise above the gross-income test for dependents.

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If you’ve considered switching your business to an S corporation but have been ineligible in the past, it’s time to take another look. Why? A 2004 tax law opened up S corporation status to a whole truckload of previously disqualified small and midsize businesses, and it paves the way for your S corp’s future expansion without forfeiting any tax breaks.

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