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Maintain tax breaks by limiting access to your home PC

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in Employee Benefits Program,Human Resources,Small Business Tax,Small Business Tax Deduction Strategies

The personal computer (PC) has become part of the average American household. But if you’re self-employed and you use your PC extensively for business, you can lose valuable depreciation deductions by allowing family members to use it.

Strategy: Keep the PC strictly for business use. Then, you can parlay the tax savings into another computer for the rest of the family. You will often come out ahead tax-wise, plus you get an extra PC out of the deal.

This tax move will also help you preserve annual home-office deductions.

Here are the details: As a general rule, your depreciation deductions are limited if you use your PC for business less than 50 percent of its total use. For starters, you can’t use accelerated depreciation (including deductions claimed in future years). You may even have to recapture tax benefits during a year that your business use drops below 50 percent.

Finally, you can’t take advantage of the Section 179...(register to read more)

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