Small Business Tax

Q. I’m interested in the dependent care credit. Can we qualify if my wife goes back to school for her master's degree?

To qualify for business loss deductions, you must show that you’re engaging in the activity to generate a profit. Otherwise, the amount you can write off is limited to the amount of your income from the activity, under the “hobby loss” rules ...

If the IRS Over­­sight Board is correct, many taxpayers will be asking “Where’s my re­­fund?” next year.

Q. Concerning qualified distributions from Roth 401(k) plans, are first-time home buyer expenses covered?

Beginning next year, it will be even tougher for most taxpayers under age 65 to claim medical expense deductions. Therefore, if you expect to qualify for a deduction this year, it’s time to go for broke.

You may hear the TV and radio ads that claim you can receive top-dollar deductions if you donate a used car to charity. But it’s not always as easy as it sounds. Strategy: Specify that the charity uses your vehicle in furtherance of its tax-exempt purpose. In that way, you can deduct an amount equal to the vehicle’s fair market value.

In this election year, many small business owners are pleading for tax relief. But the Congressional Joint Committee on Taxation is urging more business entities to take advantage of an underutilized tax break that’s already on the books: the Section 199 write-off for domestic production activities.

Q. We travel extensively to take our son to golf camps and other competitions. Besides travel, we pay hotels, meals, etc. Is any of the cost tax-deductible?

Q. We’re thinking of giving large donations to several charities. Are deductions for itemized deductions reduced this year?

Does your company need a quick cash transfusion to keep operating on all cylinders? This could be a problem if the company owes you money for a prior debt. But a loophole in the tax law allows your company to effectively sidestep cancellation-of-debt income when you forgive debt the company owes you.