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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.

When you set up a deferred compensation arrangement between you and your company, you agree to provide current services in exchange for a future payday. But there’s a chance you won’t live to collect the deferred comp. Strategy: Name your favorite charity as a contingent beneficiary. If your designated beneficiary predeceases you, the money goes to the charitable organization.

Recently, we addressed the risks involved in misclassifying employees as independent contractors and explored the three federal tests for getting it right. Be aware that Florida has own laws for determining whether a worker is an employee or an independent contractor. Along with the federal standards, you need to be familiar with the Florida tests.

The U.S. Department of Labor has filed suit against TMG National Holdings, a real estate development company based in Chicago, alleging it diverted funds intended for employee retirement benefits.

Q. If we have a Supplemental Unemployment Pay Plan to supplement unemployment benefits, do the company and the employee have to pay FICA and FUTA taxes on the supplemental pay?

If you work for an educational institution whose students provide services while learning, prepare to change your payroll systems. Depending how a court rules, you may have to end the practice of paying student stipends as a way of avoiding collection and payment of Social Security and other payroll taxes.

The new economic stimulus law subsidizes the cost of continuing COBRA medical coverage for some employees who have lost, or will lose, their jobs. But the burden of paying the rest of the premiums has shifted to employers. Strategy: Recoup the cost ASAP.

Is your closely held company struggling in these tough economic times? You may need to take some drastic measures, especially if the company already owes you money for a prior debt. Strategy: First, forgive the debt. Next, treat it as a contribution to your corporation. As long as you handle things correctly, neither you nor the corporation will have to pay any tax on the transaction.

As a way to cut costs, more organizations are replacing their company-paid benefits with voluntary benefits. However, choosing (or negotiating) the wrong voluntary benefits plan can result in extra fees, added paperwork and push-back from employees. Here are five key questions to ask when shopping for voluntary benefits:

Confused about the 65% COBRA subsidy provision that was included in the big federal stimulus package approved in February? You’re not alone. In an effort to clarify things, the IRS has published new information on its web site to help employers claim the credit for COBRA medical premiums they pay for former employees.

It’s not enough if you pay your income tax to Uncle Sam, it’s also a question of when the tax is paid. You could be assessed an “estimated tax” interest charge penalty if you don’t fork over the required tax in a timely fashion. Fortunately, you can avoid any penalties if you qualify under one of three safe-harbor methods. The new economic stimulus law eases one of these safe harbors for qualified small business owners.