Q. We may have to pay environmental cleanup costs as a result of an investigation. Can we write off all of the costs on this year’s return?
Small Business Tax
Section 179 vehicles should be a key part of your small business tax deduction strategies. Can Section 179 property fit in with your business tax strategies?
Let Business Management Daily help you get each and every rental property depreciation credit and business tax deduction you’re entitled to.
Suppose your employees regularly incur business expenses that are not reimbursed by your company. For example, they might personally pay for business travel or tools. If that’s the case, there’s a way you can save income tax for employees while cutting employment tax for your company: Set up a salary reduction plan.
The IRS now requires many small business owners to use its Electronic Federal Tax Payment System to deposit employment taxes. Your business must use the electronic method if it has aggregate tax deposits of more than $200,000 ... If your company doesn’t comply, it may be assessed a 10% excise tax for failing to deposit taxes on time—even if the taxes are deposited in a timely manner by other means.
A recent government study showed that the average small business overpaid its taxes by $11,638. That’s sad enough. But sadder still is the fact that the tax code is actually written to favor small businesses like yours.
You may have to travel away from home on business for an extended period of time. Of course, you’d rather spend weekends back with your family, but it might cost too much to fly back and forth. Strategy: Have your company reimburse you for the air fare. As long as you provide adequate accounting of expenses, the reimbursement is deductible by the company and tax-free to you.
Q. After her divorce, our daughter and her two small children moved into our home. Can we claim all three as our tax dependents?
At least there’s a silver lining in the recession: For the first time in more than three decades, the Social Security wage base isn’t expected to increase next year. The actuaries at the Social Security Administration are predicting that the wage base will remain at $106,800 for 2010 and even beyond into 2011.
Have you seen the ads on TV, or heard them on radio, promoting low-cost payoffs to the IRS for unpaid federal tax debts? Chances are, if something sounds too good to be true, it probably is. And if you’re waiting for the refund from an amended return, it may take awhile longer.
Q. My father is contemplating a reverse mortgage. Will he have to pay tax on the deal?
If you’re buying a home, complete the deal before Dec 1. Under a new law provision, you may be able to claim a credit equal to the lesser of $8,000 or 10% of the purchase price. For this purpose, a “first-time homebuyer” is defined as someone who has not owned a principal residence for the three years prior to the purchase.