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.

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Suppose you converted funds in a traditional IRA to a Roth IRA last year, but now you realize that you made a mistake. Strategy: Undo the Roth conversion. The IRS allows you to “recharacterize” a Roth back into a traditional IRA as long as you meet the timing requirements.

Despite the broad reach of the “kiddie tax,” income-splitting with family members is still a good tax idea for wealthy individuals.
Travel and entertainment deductions remain a top audit target because this area is considered ripe for abuse by taxpayers.
In a recent posting, the IRS announced several improvements to its offer-in-compromise program, including revisions to Form 656 and related documents.

Suppose you and your spouse attend a fundraising dinner for your favorite charity. The dinner cost you $100 each for a total of $200. But you can’t deduct any charitable donation to the extent you receive a benefit in return. The tax law calls them “quid pro quo contributions.” Strategy: Obtain a written statement from the charity.

As with certain other tax law provisions, another extension of the “charitable rollover” remains in doubt for the 2014 tax year. But you don’t have to wait around for Congress. Take matters into your own hands.
Are you planning to renovate an older building in a historic area? Before you start tearing down the walls, cash in on a unique tax break from your Uncle Sam.

Taxpayers once were able to use losses from real estate, cattle breeding, oil and gas and equipment leasing deals to offset highly taxed income. Then the government imposed “passive activity loss” rules that turned tax shelters into a dying breed. Strategy: Invest in Passive Income Generators (PIGs).

At this point, it’s anybody’s guess if the Section 179 allowance will be increased this year. Small business owners can’t count on it so they might have to take regular depreciation deductions. Strategy: Buy qualified property before Oct.  1.

Although the real estate market nationwide hasn’t returned to the “glory days” property taxes are still going through the roof. Strategy: Appeal a property tax assessment when you have reasonable grounds.

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