Small Business Tax Strategies

If the 100 percent federal employment tax penalty doesn’t strike fear in the hearts of small business owners, it should. Why? That tax-code provision requires the person “responsible” for unpaid employment taxes to personally pay 100 percent of the amount withheld from employees’ paychecks.

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Back in the ’90s, Congress wiped off the books one of the most hallowed tax breaks when it repealed five-year “income averaging” on retirement plan payouts. That tax break allowed you to calculate the tax on a lump-sum distribution as if the funds were paid out over five years instead of just one. But an even better tax break—10-year averaging—managed to avoid the ax.

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With the summer approaching, it’s time to start planning some time on the beach or at the golf course. If you’re self-employed, you may be able to turn some of that typically nondeductible vacation time into a tax-saving getaway.

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Does your company need a quick cash transfusion to keep operating on all cylinders? That could be a problem if the company owes you money for a prior debt.

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To figure what portion of a lump-sum distribution qualifies for the capital gains break, multiply the taxable amount by this amount: The number of months of pre-1974 plan participation divided by the total number of months of plan participation. (Any portion of a calendar year before 1974 counts as a full 12 months. Any part of a month of participation after 1973 counts as one full month.)

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Are you getting ready to hand over the reins of your corporate business to the younger generation? Typically, you might arrange to sell shares of company stock to your successors or simply give the stock to them. But take note: Each of these options can carry a heavy tax price.

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How can you save for retirement while operating your business? At one time, small business owners were often left out in the cold. But retirement savings isn’t just for the “big boys,” anymore.

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Serving as the executor of an estate is a weighty responsibility… perhaps even more so than you might think.

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No matter how far you travel on business, you can deduct auto expenses so long as the trip’s primary purpose is business- related. That’s true even if you derive secondary benefits from the trips.

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Do you need other employees behind you in order to open a Roth IRA

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