As the economy heats up, you'll need to work harder to retain good employees. One good tactic: Set up an employee-achievement-award program. If you handle things the right way, they are tax-free to employees and fully deductible by your company.
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.
For many U.S. taxpayers, "March Mad-ness" has nothing to do with college basketball. It's all about dashing around gathering receipts, filling out forms, meeting with your tax guru and hoping you'll emerge victorious in the 1040 game.
Lower rates. The 27, 30, 35 and 38.6 percent individual federal rates that applied for 2002 are reduced to 25, 28, 33 and 35 percent, respectively, for 2003. The 10 and 15 percent federal rates are unchanged.
Mark mid-April on your calendar. That's when Tax Freedom Day, the symbolic day when U.S. taxpayers' annual earnings to date surpass the taxes they'll pay that year.
Q: I realized a large long-term stock loss early in 2003 when the capital gain tax rate was still 20 percent. But I had to carry over part of the loss because I had little stock gain in 2003. Do I have to use the loss to offset gain taxed at only 15 percent in 2004? S.T.P., Lake Geneva, Wis.
The March 15 deadline for filing a 2003 corporation tax return is approaching quickly. (See tax calendar, page 5.) Rather than slapping together your tax paperwork at the last minute, punt. You can earn a six-month extension by filing Form 7004, Application for Automatic Extension of Time To File Corporate Income Tax Return, and paying what you estimate you owe.
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.
Before wrapping up your business tax return, rack your brain (and your records) to make sure you haven't missed any juicy write-offs.
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.