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.

Q. I bought a new computer through my self-employed business. Can I deduct the full cost if I use it at home?

 

The small biz tax law enacted last year imposed tougher standards on professional tax return preparers. It also increased the penalties that paid preparers face for tax understatements. So what does this have to do with you? Plenty

Business is bad for many businesses. Worst of all, you may have difficulty collecting payment for products delivered or services already performed. Strategy: Step up your collection efforts. If you don’t receive payment before year-end, you may be able to deduct the amount as a “bad business debt” on your 2008 return.

If you hire individual construction contractors to work for you, you have only a few weeks to make sure they are in compliance with a new state law. Beginning on Jan. 1, individual independent contractors working in the construction industry must obtain an Independent Contractor Exemption Certificate.

The economic stimulus law creates a tax incentive to buy business equipment this year. Under the new law, your business can claim “bonus depreciation” for qualified new (not used) business assets placed in service before 2009. But you may not derive any tax benefit from year-end purchases if you expect a loss this year ...

In the tax world, the early bird often gets the worm. This is particularly true for property and income taxes imposed by state and local tax authorities. Strategy: Pay tax installments in December that are due early next year ...

The number of employers with substantial payroll tax debts has ballooned in the past decade. About 1.6 million businesses failed to send taxes to the IRS regarding employees’ wages and FICA taxes, and that totals about $58 billion in unpaid taxes ...

The most significant provision in the Emergency Economic Stabilization Act of 2008 for small businesses as well as individuals is the one-year alternative minimum tax (AMT) “patch,” which will have very important budget impacts for small businesses. 

From a tax perspective, the time may be right to buy a new (not used) vehicle for business driving. Strategy: Place the vehicle in service before 2009. Reason: It qualifies for the new—but temporary—50% first-year bonus depreciation deduction.

Under the kiddie tax, unearned income above an annual threshold received by a young child is taxed at the parents’ top tax rate. The income threshold for 2008 is $1,800. The kiddie tax has been a thorn in the sides of parents for years. But it can really stick it to you in 2008. Here’s why ...