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.

The GAO recently released a detailed report with a set of recommendations to address the persistent, widespread problem of employer misclassification of employees as independent contractors. The report urges the DOL and the IRS to step up enforcement efforts, so now's a particularly opportune time for employers that have classified any workers as independent contractors to carefully review those decisions.

Q. One of our employees recently got married. She’s informally going by her new last name, but she hasn’t changed her name on her Social Security card and doesn’t plan to. We submit all payroll information using her maiden name. Do we face any liability?

Q. What is the Illinois Employee Classification Act? I’m not sure if it applies to my company.

Q. Our company is purchasing used equipment from one of our suppliers. Can we deduct the full cost under Section 179?

Adjust your withholding allowances on Form W-4 if you overestimated the amount of tax you needed to have withheld this year or if you didn't pay enough tax during the year through quarterly installments or income tax withholding.

Under Section 179 of the tax code, your business may elect to “expense” (i.e., currently deduct) the cost of qualified assets up to an annual limit.. Strategy: Acquire and place business assets in service before year-end. After 2009, the maximum deduction is scheduled to revert to $125,000 (plus indexing for inflation).

Q. Our business is interested in using a “common paymaster.” Can we report all the payroll tax deposits on one form?

The tax law permits you to deduct the full amount of most charitable donations if you’ve kept proper records. Strategy: Donate securities that you have held for more than a year and that have appreciated in value. Reason: You can deduct the full fair market value of the securities without ever paying tax on the appreciation.

The so-called “kiddie tax” may come into play if your child’s unearned income exceeds a specified annual threshold ($1,900 for 2009). In that case, the excess income is taxed at the top marginal tax rate of the child’s parents—regardless of the original source of the funds. Strategy: Keep your child’s investment income below the $1,900 level.

Here's a collection of creative employee benefits programs, excerpted from our Compensation & Benefits newsletter: 1. Expectant and new moms get help from co-worker "buddies." 2. Shopping-spree contest helps boost sales, morale. 3. Cash advances help workers dress for success. 4. Employee committees choose company wellness programs. 5. Company pays employees to leave their cars at home. 6. Deployed workers get full pay, benefits and care packages. 7. Medical firm picks reality TV star as its "wellness ambassador." 8. British firm pays for "Botox leave."