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 Deduction Strategies
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.
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.
If you're the big cheese at your company, you can control your own tax destiny to a certain extent. For example, you can usually time year-end bonuses to your personal tax advantage.
You own equipment, furniture and other assets that your business could put to good use. You could sell those assets to your business, but that might drain your company's cash reserves. Plus, the sale proceeds would be taxable to you personally.
President Bush signed legislation that provides $6.1 billion tax relief for people and businesses reeling from Hurricane Katrina. While most of the tax-law changes apply to those in the hard-hit Gulf region, some breaks extend to charity-minded taxpayers throughout the country.
We don't want to sugarcoat things: Getting hit with an IRS "field audit" is a worst-case scenario and a cause for genuine concern. The process is expensive, time-consuming and requires a more comprehensive defense strategy than the other two types of audits we've discussed in our audit series ("correspondence audits" handled through the mail and "office audits" performed at an IRS office).
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.
The first piece of our audit series explained how you can breeze through an IRS "correspondence audit" conducted through the mail. But the stakes are considerably higher—as is the stress level—if you're tapped for an IRS "office audit."
In the waning days of summer, President Bush signed the highly anticipated Energy Tax Incentives Act of 2005. The massive new energy law contains almost $15 billion in tax cuts designed to encourage conservation, expand domestic energy production and develop alternative energy sources.
Do your employees need special tools for their jobs? Typically, you provide the tools that workers need or you reimburse employees for tools they must buy on their own. If you handle everything correctly, those reimbursements are tax-free to employees and tax-deductible for you.