Posts Tagged ‘tax deductions’

Some Year-End Tax Reduction Strategies For Small Businesses

December 9, 2009

For everyone:
• Take charitable donations by the end of the year and make sure you have receipts for all contributions above $250.
• Take advantage of the $13,000 gift tax exclusion which can be done without reporting to the IRS for any number of individuals and not pay a gift tax.  
For business owners there are some things that can be done:
• Some expenditures (business equipment, supplies, etc.) qualify for the up to $250,000 business property Section 179 expense of assets bought and placed into service this year.
• In a partnership or S corporation, you can take advantage of business losses for 2009.
• If you are self-employed or own a small business, you can set up a retirement plan and take advantage of making payments toward the plan, which will reduce your 2009 taxable income.
• Consider extending your subscriptions to professional journals, paying union or professional dues, enrolling in (and paying tuition for) job-related courses, etc., to bunch into 2009 miscellaneous itemized deductions subject to the 2 percent-of-AGI floor.
Also you should consider making changes that will reduce your income tax for the 2010 tax year by taking the following actions:
• Increase the amount you will set aside for next year in your employer’s health flexible spending account (FSA, HRA or HSA), especially if you set aside too little this year. Be sure to include costs for over-the-counter drugs, such as aspirin and antacids.
• If you become eligible to make health savings account (HSA) contributions in December of this year, make a full year’s worth of deductible HSA contributions for 2009.