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 American Recovery and Reinvestment Act of 2009 gives small business owners a second chance at a “one-time” tax-saving opportunity. It revives the enhanced Section 179 deduction and “bonus depreciation” tax breaks that officially expired after 2008. These two tax goodies can be combined so that your small business can write off most, if not all, of the cost of new assets placed in service this year.

Uncle Sam often examines deductible travel expenses through a magnifying glass. So both employers and employees must meet strict recordkeeping rules—or face the consequences. Fortunately, you can take a shortcut. Use IRS-approved per-diem allowance rates in lieu of accounting for every bagel and cab ride from an employee's business trip.

Here’s a cautionary tale to consider if you’re planning to upgrade your time card to a high-tech electronic system.

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.