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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.

Q: I gave my daughter stock shares that I bought for $10,000. On the day I gave her the shares, they were worth about $12,000. Now, it's jumped to about $16,000, and I've advised her to sell. Is her taxable gain the full $6,000? P.L.A., Santa Barbara, Calif.

As an S corporation owner, you can avoid the double taxation that plagues income earned by a regular C corporation. Instead of being taxed twice—once on the corporation level and once personally—income flows through to the S corporation shareholders. So, it's only taxed once at your personal level.

It took many years, but self-employed people are now even-steven with other business entities when it comes to deducting health insurance. They can write off 100 percent of their health insurance premiums, including amounts paid for family coverage, up to the business's amount of net income.

If you offer employees a tax-advantaged flexible spending account (FSA) program, the IRS recently said you can give them an extra 21/2-month "grace period" beyond the plan year to spend their FSA dollars.

When you started your small business, you poured most of your earnings back into the operation. Unfortunately, that didn't leave much cash for retirement savings. Now that your business is running smoothly, you may hope to make up for lost ground—and fast.

Q: I've been working for a company that is rapidly losing money. I've heard through the grapevine that the owners haven't paid the employment taxes for the past year. Could that cause me trouble personally with the IRS? E.L.C., Cleveland

With the rapid growth of e-filing and online assistance, the IRS will close 68 taxpayer assistance centers in 29 states by year-end.

Starting June 27, if you set up a charitable remainder trust (CRT), you'll need to jump through new IRS hoops.

In a recent article, we discussed several ways to chop down the rising property taxes on your personal residence. (5/30/05 issue) But escalating property taxes aren't limited to homeowners. Small business owners are getting socked lately as the value of their business property has gone up, too.

Before you know it, summer will be over and another school year will be under way. In our last special report, we focused on deducting your child's education costs. But what if you are the one going back to school or enhancing your learning in conferences or seminars? As long as you make the tax grade, you can deduct the work-related education cost as a business expense. But it's easy to flunk out when you file your return. Read on to learn the rules.