Social Security taxes take a big bite out of your paycheck. That's why it's a huge relief to highly paid employees when autumn finally rolls around. Reason: Once they clear the Social Security wage base for the year, they won't need to pay any more Social Security tax for the year.
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: My husband passed away last year. Now, I'm preparing to sell the house we've owned for 25 years. Can I still shelter $500,000 of the home-sale gain from taxes? I know that $500,000 is the joint-filers amount, but I think I read that I would still qualify? No name, Springfield, Ohio
Question: My wife and I operate separate self-employed businesses. This year, I expect to show a big profit, so I plan on buying new machinery and tools before Jan. 1 that I can expense. My wife's business is likely to show a loss. Will her loss reduce the amount I can claim under Section 179? If so, what can I do about it? — C.S., Rochester, N.Y.
Q: I've heard that food expenses will be deductible beginning next year. Will itemizing be required? O.D., New York
Q: I own real estate that I plan to sell to my son through an installment sale. My CPA says this can't be done because we're related parties. Is this true? D.R.T., St. Petersburg, Fla.
The new bankruptcy law that took effect Oct. 17, protects funds held in a qualified retirement plan from outside creditors. There's no limit on the amount you can shield from creditors.
Although Roth IRAs have been around for a few years, some taxpayers are still spooked by this newfangled version of the traditional IRA. As you'll see, 2005 may be an especially good year to look at different ways you can put money into a Roth IRA before year-end.
Q: I read somewhere that employees can now spend the money in their flexible spending account after Dec. 31. My employer hasn't given any notice about this. Is that extension automatic? S.M., Cincinnati
During an audit, chances are that you won't be able to produce all the receipts, bills or other pieces of written information you'll need to back up your claims, especially if the audit comes several years after the tax year in question.
Q: I've heard that I'd have to pay tax on a home sale if I don't use the profits to buy another home. I didn't think that's true. Am I correct? O.D., New York City