Q: I am 72 and work part time. I earned $15,000 from my part-time job last year. Can I contribute to an IRA for the 2003 tax year? D.W., Jacksonville, Fla.
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 read your recent article about filing separate tax returns. If my wife and I file separately, do we simply split our itemized deductions? G.S., Manchester, N.H.
Thanks to the recent Bush tax acts, you can deduct on your 2003 tax return either 30 percent or 50 percent of the cost of qualifying new assets that you bought and placed in service last year. The remaining amount is then depreciated using standard tax rules.
Instead of grabbing your maximum first-year depreciation write-off (as described above), you can choose another route: Mix and match depreciation methods to claim a smaller first-year depreciation write-off and thereby fine-tune your business's 2003 taxable income level.
Q: I run two sole proprietorships out of my house. Do I need to use separate rooms for each business if I want to claim home-office deductions? W.D., Smyrna, Ga.
Before wrapping up your business tax return, rack your brain (and your records) to make sure you haven't missed any juicy write-offs.
March 15 isn't just the deadline for corporations to file 2003 calendar-year income tax returns. It's also the deadline for calendar-year C corporations to switch to S corporation status for 2004.
1. Self-employed? Deduct full health premium
Finally, self-employed people can write off 100 percent of their health insurance premiums (up from 70 percent in 2002).Note:
You can reap significant additional tax savings by making your spouse an employee of your sole proprietorship or single-member LLC and setting up a medical expense reimbursement plan. That strategy could let you deduct all your family's health costs (including uninsured expenses) on Schedule C, plus it could lower your self-employment tax bill.
If you receive a phone call from someone who asks for personal financial data and claims to be from a federal agency, such as the IRS, ask that person to put the request in writing.
Millions of taxpayers now file their tax returns via the Web, and the number is likely to grow. Should you join the crowd?