This article is chock FULL of great ideas on how to save money on your taxes by making some smart moves BEFORE the end of the year. Here is a summary of the article (it’s not available online), with some added links as well.
• Invest in updated equipment. “Under new law, you can cash in an enhanced Section 179 deduction for 2010 for both new and used equipment and software, plus a 50% ‘bonus depreciation’ deduction for new (not used) equipment and software.” (“9 Top Tax Strategies for Small Business Owners”: Small Business Tax Strategies, November 2010)
• Cancel your bad debts. Be sure to keep detailed notes on your efforts to collect on late payers. If you cannot obtain payment by year end, you “may be able to deduct the amount as ‘bad business debt’ in 2010.” (“9 Top Tax Strategies for Small Business Owners”: Small Business Tax Strategies, November 2010)
• Starting out? Get going! “The new law authorizes a maximum deduction of $10,000 of start up expenses for … 2010 only. … These include investigatory expenses” (marketing research), “pre-opening expenses like advertising, salaries and wages paid to train employees; consulting fees and other professional services; and travel costs …” (“9 Top Tax Strategies for Small Business Owners”: Small Business Tax Strategies, November 2010)
• Travel! The standard mileage rate for 2010 is $.50 a mile, plus parking and tolls. (more details here:http://www.irs.gov/newsroom/article/0,,id=216048,00.html)
• Fix what needs fixin’. Repairs are deductible, capital improvements are not. Make the repairs needed before year end in order to reduce your tax liability. If you are also doing capital improvements, make sure you do them at a different time – like a few weeks apart – so there is no confusion about what is a repair and what is a capital improvement as far as the government is concerned as capital improvements must be added to the property’s basis.
• Eat, drink and be merry! 50% of entertainment and meal purchases that happen before or after a business deal count. And holiday parties are 100% deductible as long as all employees are invited.
As always, if you need help or have questions, please do not hesitate to call on us. 330-926-0023, or [email protected] Thanks for reading!