Most people think of life insurance strictly as income replacement for their family if they suddenly die. But if you no longer need that big life insurance policy and you're looking for a big write-off this year, consider this strategy
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 a recent issue, you said that both engineering and architectural services qualify as "manufacturers" for purposes of the new manufacturing deduction (see 3/21/05 issue). Can you tell me if a laboratory that does tests (for physicians) created from raw materials qualifies for the deduction as this type of service? J.V.M., Md.
If you're like most people, you finally put your 2004 tax return to bed a few short weeks ago. But then comes a sinking realization that you missed a tax deduction or credit opportunity on your return. Or maybe you accidentally failed to report income, miscalculated a capital gain or forgot a business deduction. Should you file an amended return or not? That is the question.
Q: We own several acres of land in a rural area. The land includes a small house that will become our principal residence. If we sell off part of the land (but hang on to the house indefinitely), can we avoid gains taxes under the home-sale-gain exclusion rules? B.M., Burlington, Vt.
Sooner or later, you may decide to sell off your S corporation and retire. If you run a family shop, you may plan to sell your stock to younger family members who are already working in the business.
Q: I'm 60 years old and have a traditional IRA with $250,000 in it. I also have a Roth IRA in its third year. Can I roll over the traditional IRA to a Roth and use $150,000 of NOLs to offset any tax that must be paid? B.W.
If you're shopping around for a new business vehicle, take into account the just-released IRS depreciation limits for cars placed in service in 2005.
Q: I'm confused about the gift-tax exclusion. My accountant told me I can give away $11,000 a year, but my brother says the actual exclusion is $1 million. Who is right? N.S., Memphis, Tenn.
If your company owns a weekend retreat where you like to enjoy the great outdoors, you probably know that the IRS's "entertainment facility" rules typically prevent you from deducting depreciation and related expenses for the place, even if you entertain clients there.
Q: My tax preparer said I didn't need to enter my Roth IRA contribution on my tax return. It seems odd that I wouldn't have to tell the IRS about this. Is he right? E.M., Madison, Wis.