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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Use this list to take advantage of the favorable tax provisions on the books while avoiding potential year-end pitfalls.
If you and your spouse run an unincorporated business together as the only two owners, the operation is generally treated as a partnership for tax purposes. In other words, you’re required to file a partnership tax return and otherwise comply with all the complicated federal income tax rules for partnerships. Strategy: Elect to treat the business as a “qualified joint venture.”
In a case of first impression, the 9th Circuit Court of Appeals reversed the Tax Court’s earlier ruling and concluded that the limits for mortgage interest apply on an individual (per-taxpayer) basis when homes are co-owned by unmarried individuals. As a result, an unmarried couple that owned homes together could write off the interest on a combined total of $2.2 million of mortgage debt.
Do you own a boat or a car you might donate to charity? Before you pull the trigger, consider another option.
If you recently acquired or started a new business, or if it took several years for your company to become profitable, you may be ready to put more money into employee benefit plans like a qualified retirement plan. Strategy: Get your retirement plan going before the end of the business tax year. This will entitle your business to a tax credit—a dollar-for-dollar reduction of the company’s tax bill—for plan startup costs.
Suppose that your child in college plans to move off-campus next semester. At the same time, you’re looking to buy real estate to shelter income from tax. This could be an opportunity to kill two birds with one stone.
Suppose your employees regularly incur business expenses that aren’t reimbursed by your company. For example, they might personally pay for business travel or tools. In that case, there’s a way to save income tax for employees while cutting payroll taxes for your company.
Now that autumn has arrived, it’s time to begin “harvesting” capital gains or losses from selling securities held in taxable brokerage firm accounts.
The maximum Section 179 deduction allowed under the tax law is currently only $25,000 for tax years beginning in 2015. Beware of a special tax trap for property placed in service in the last quarter of the year.
With the college football season underway and basketball looming, you may root hard for your favorite teams. But you can do more than show vocal support from the sidelines. Donate funds to a “booster club” or similar program. This entitles you to a charitable deduction for all or part of the donation—even if the gift provides you with preferred ticket status for athletic events.