List Categories | List All Articles | List Articles By Title
Small Business Tax Deductions for Year End 2004
As a small business owner, it's wise to familiarize yourself with some key deductions that may reduce your tax bill for 2004.
Employee Benefit Plans - You may deduct contributions to employee benefit plans (such as health insurance plans and retirement plans). Depending on your circumstances the maximum contribution that you may deduct per employee in a qualified retirement plan can go up to:
$100,000 or more With a Defined Benefit Plan
$ 44,000 With a 401(k) plan
$ 41,000 With a SEP-IRA or Keogh
Automobile Expenses- You can elect to deduct the actual expenses incurred (including gas, oil, tires, repairs, insurance, depreciation, and rent or lease payments) for the business-related portion of your car or truck expenses, or simply take the 2004 standard mileage rate of 37.5 cents per business mile.
Social Security Taxes - You may deduct Social Security and Medicaid taxes paid to match required withholdings on employee wages, federal unemployment taxes, as well as real estate or personal property taxes paid on business assets.
Home Office - Depending on whether you use your home or other real estate for business purposes, you may deduct some or all of any mortgage interest paid, as well as some or all of the maintenance and repair expenses associated with the property. The cost of utilities and business supplies associated with business use are also deductible.
Depreciation - Depreciation may be taken on passenger cars, equipment used for entertainment or recreational purposes (i.e., photographic equipment, cell phones and computers), as long as these items are used solely for the business.
Bonus Depreciation - The 'bonus' depreciation deduction of up to 50 percent of the cost of new business equipment in the year of purchase applies only to property placed in service on or before December 31, 2004. You may want to consider making any significant equipment purchases before year-end to take advantage of this expiring provision.
Professional Fees - You may deduct professional fees, such as those paid to a lawyer or accountant.
Meals and Entertainment - You may deduct 50 percent of meal and entertainment expenses associated with the conduct of your business.
State and Local General Sales Tax - Beginning in 2004, you will have the option of electing to take an itemized deduction for state and local general sales taxes in lieu of the itemized deduction provided for state and local income taxes.
Charitable Donations of Vehicles - Through 2004, a deduction equal to the fair market value of a donated vehicle is allowed. Starting next year, however, the deduction allowed will generally be limited to the gross proceeds from the sale of the vehicle by the charitable organization.
Remember to keep on file the records and documentation necessary to substantiate all of your deductions. You should consult a tax preparer or professional tax advisor to determine how specific tax rules may impact your individual situation.
About The Author
Daniel Lamaute specializes in setting up retirement plans for the self-employed. Visit http://www.investsafe.com to learn about methods to maximize retirement contributions and to reduce taxes and penalties on early withdrawals.
Seven Key Tax Deductions for the Self Employed
As a sole proprietor, it's wise to familiarize yourself with the some key deductions that may reduce your tax bill for 2004.Small-business consultants generally recommend that you hire an accountant to prepare your tax returns, payroll and financial statements.
How to Donate Your Car to Charity and Get Tax Deduction
Donating your used car to charity is a win-win situation; the charity gets your gift and you get tax deduction. Below are some simple steps to make a car donation.
Donating Cars To Charity - New Tax Rules
On June 3, 2005, the IRS released guidance on charitable deductions for donated vehicles. The American Jobs Creation Act (AJCA) radically changed the amount of the deduction taxpayers can claim for their donated car.
Fiscal Deity: Tax Consultant
Strategic planning throughout the year results in a minimal tax balance. The objective of planning your tax payables is not to prevent paying taxes, it is to pay no more than your fair share of taxes, and keep your money where it earns you the most.
How To Claim CHILD TAX CREDIT The Right Way And Add An Extra $2,000 To Your Refund
Need an Offshore Sales Office in a Tax Free Environment?
The 100 year old investment-banking firm of Warburg, Dillon Read (on Park Ave. N.
Tax Trap #4 -- The Quagmire of Depreciation
If you are a Small Business Owner or Self-Employed Person, there's one especially lucrative tax break that not only puts money in your pocket, it also makes the filing of your business tax return much simpler.What am I talking about? It's called the Section 179 deduction, and if there's one tax break you need to understand, this is it.
The Implications of Income Tax Charge on Estate Planning
OverviewIn the Pre-Budget Report of December 2003 the Chancellor Gordon Brown announced proposals to levy an Income Tax charge from 6th April 2005 in those circumstances where the transferor of an asset retains and interest or continues to benefit from that asset. In the instance of real property, the 'benefit' envisaged is the transferor continuing to reside in the property he/she has allegedly given away.
IRS Statute of Limitations: Do Taxes Ever Expire?
Many Americans believe that an IRS debt is a debt for life and that the tax collector can hound them to the grave. Thankfully, that is not the case and there are statutory time limits on the ability of the IRS to examine and collect taxes.
What the Tax Software Companies Dont Want You to Know
Haven't done your taxes yet? No problem. Now there is a new way you can use top tax software programs, like TurboTax and H&R Block, to get your taxes done quickly and easily.
Small Businesses Filing Amended Federal Tax Returns to Recover Money
Small Businesses Filing Amended Federal Tax Returns to Recover Money By Darren Oliver April 15th may be gone but, but certainly not forgotten - especially if you, like millions of small businesses, unknowingly overpaid your federal taxes and can recover money by filing an amended return. According to the IRS tax code, you have three years from the filing date for the tax year in question to file an amended return.
Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make
NOTE: This is the first in a series of 5 articles: "Small Business Tax Traps and How To Avoid Them"If you're a sole proprietor, perhaps you've considered incorporating your small business or self-employment activity.And so maybe you've been wondering, "When is the best time to incorporate?"From a legal standpoint, any time is the best time.
The Annual Gift Tax Exclusion: Getting The Edge
Whether helping the kids with a down payment on their first home, paying the premiums on a life insurance policy in an irrevocable trust, or moving appreciated assets to a younger generation, annual gifting will touch the lives of millions of Americans. But before the transfer is made, an investor should spend some time looking at the investment and the tax ramifications of the property to be passed.
Tax Investigation - What You Need To Do
The knock on the door from a Tax Inspector is something that every taxpayer fears. Your immediate thoughts will be "Have I been honest with my tax returns or not".
Send Your Kids To Summer Camp and Write It Off
If you paid someone to care for a child so you could work, you may be able claim a tax credit for child and dependent care expenses on your federal income tax return. This credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13.
Tax Tips - Which Tax Form Is Right For Me?
IRS Tax forms can be confusing.Am I a 1099 or a W-2.
Insider Guides to IRS Audits!
Ever wish that, as a business owner, you knew exactly what would raise "red flags" at the IRS? Or how to make an IRS audit go as smoothly and painlessly as possible?If you're in the right type of business, you can get that information, directly from the IRS!Traditionally, IRS examiners have been responsible for auditing many types of businesses. An examiner might audit a grocery store one week and a construction company the next.
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax for the self-employed is not far off. Network marketers who receive a form 1099 at the end of the year, and/or who are expected to owe $1,000 or more in taxes, must file a form 1040-ES Payment Voucher quarterly to avoid paying a penalty.
Small Business Tax Credit - Americans with Disabilities Act
Many small businesses complain when confronted with the expense of complying with the Americans with Disabilities Act. Most do not realize that there are a number of tax incentives available to offset the costs.
Highlights of IRS List of 2005 Tax Scams
Each year, the IRS lists various scams taxpayers get caught up in. The top 2005 scams include several that manipulate laws governing charitable groups, abuse credit counseling services or rely on refuted arguments to claim tax exemptions.
home | site map
All articles are copyright to their owners.
Note: this website lists articles, We do not Write Articles !