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.
I use a corporate credit card to pay
business expenses, including inventory items. I’ve racked up a lot of
reward points that I’ll use for both business travel and personal
travel. Do these points count as taxable income? J.W.
The IRS just released official guidance on the 2005 energy-tax law that revamps the type of tax credits you can earn for buying environmentally friendly vehicles. (IRS Notice 2006-9)
Sadly, the bonus depreciation rules have expired. That means you’re stuck with regular depreciation deductions under the Modified Accelerated Cost Recovery System (MACRS), which requires you to write off business equipment over several years. Don’t despair. You still have the Section 179 deduction privilege on your side. And, when used correctly, this not-so-secret tax weapon can help you rescue big current-year write-offs … at least for now.
You can’t generally deduct the cost of commuting back and forth between your home and work; that’s treated as a nondeductible personal expense. But with a bit of creativity, you can still claim generous tax deductions for certain types of local driving. Here are three ways to squeeze out some extra tax-deductible mileage.
Are you waiting until the last minute to file your tax return? Maybe you’re putting things off because you figure you’ll have to pay Uncle Sam a tidy sum. At least you can still put a good-size dent in your tax bill at this late date. Here’s a sampling of seven prime opportunities for tax-return procrastinators.
The IRS can hit you with dozens of different penalties if you fail to follow the letter of the tax law. They’re often arcane and difficult to understand. And although many of the penalties are relatively small on their own, they can add up quickly. So, a single mistake could snowball into hundreds or thousands of dollars.
If the IRS audits your return, it can slap you with a back tax bill, interest and penalties. But you may be able to avoid the penalty portion if you can prove that you relied on the advice of a competent tax professional.
When it comes to avoiding IRS penalties, the best offense is a good defense: Avoid being assessed penalties in the first place.
You’ll owe more than just back taxes and penalties if you file late or incorrectly. The IRS can charge interest on your underpayment amount.