It's already Memorial Day, so summer is right around the corner. While you're enjoying the warmer weather, heat up your tax savings with some timely tax techniques.
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: In 2002, I bought stock in a company that just recently merged with another company. I bought the shares at $15; now they're worth only $12 and change. Can I deduct a loss for 2005? L.A.R., San Diego
In many U.S. cities, houses bought just a few years ago have more than doubled in value. But unless you plan to move soon, such a "paper windfall" means nothing other than a soaring property tax bill.
Q: I own an auto repair shop in Maryland. We've switched our compensation plan to a system in which technicians are paid a base salary, plus a bonus based upon billable hours. Since technicians routinely work a 45-hour workweek, must we pay them any overtime? R.B.S., via e-mail
It's rare when you can have your tax cake and eat it too. But a new private letter ruling issued by the IRS gives certain older business owners a generous slice. It allows them to preserve the tax benefits of a "grand-father election" made over 20 years ago.
While school is out this summer, your teenage child may work full time or part time. Of course, income taxes will be withheld from those wages, even if your child won't have any income tax liability for 2005.
With precious little fanfare, the Working Families Tax Relief Act of 2004 revamped the rules for dependency exemptions. It created a uniform definition of "child" and relaxed the requirements for certain taxpayers. But the old rules still apply in some situations, resulting in even greater confusion for taxpayers. Here's a quick primer on the old rules, plus how you can take advantage of the new rules.
Have you joined the millions of taxpayers who use computer software to complete their tax returns? For do-it-yourselfers, it's usually faster and easier than plowing through the paper version, and at a relatively low cost.
Q: I am the executor of my parents' estates. My father passed away two years ago and my mother this February. Can I redirect part of my inheritance from my mother to a charity? S.J.P., Longmont, Colo.
Heads up: The IRS plans to ratchet up the audit pressure on small businesses in the coming months.