Don’t expect the taxman to go easy on you in retirement. When you start collecting Social Security retirement benefits, up to 85% of the benefits may be taxable. Strategy: Be proactive about taxation of Social Security benefits. Depending on your situation, you can use one or more of four strategies to reduce or eliminate tax liability.
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.
Are you tired of paying tax twice on income as a C corporation owner? First, income is taxed to the corporation as it is earned and then again to you personally when it is paid out as dividends. To avoid the double tax whammy, consider a switch to S corporation status. But watch out for the built-in gains (BIG) tax.
You might think of life insurance strictly as income replacement for your family if you should suddenly die. So, at some point, you don’t need that big whole life policy anymore. Strategy: Donate life insurance to charity. As long as you don’t retain any “incidents of ownership” in the policy—such as the right to change the beneficiary—you can claim a current tax deduction for your generosity.
The tax law limits write-offs for vacation home rentals if your personal use exceeds the greater of 14 days or 10% of the days the home is rented. In that case, your deductions are limited to the amount of your rental income. Strategy: Make sure your annual use doesn’t cross the 14-day/10% barrier.
Most small biz owners have a PC or a Mac at home. For example, a self-employed individual may use a home computer to run spreadsheets and keep business records, while the kids use it for homework and surfing the Internet. Strategy: Limit your personal use of the computer. If this is the only computer in the home, you might even buy another one for the rest of the family. It costs more upfront, but the tax savings are usually worth it.