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 new HIRE Act preserves the enhanced Section 179 deduction of $250,000 for assets placed in service in tax years beginning in 2010. Without the tax law change, the maximum deduction was scheduled to fall to $134,000. Strategy: Load up on new business equipment this year. It may be your last shot at a $250,000 instant write-off for the near future.
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.
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.