"Evolutionary biology is now uttering and seeking those forces that link us with all those that have being."Adrian Forsyth
|
| |
Growing Your Own Salad ...
Anywhere you go online nowadays, you will see an ad offering to pay you cash for your opinion. Whether it's a paid survey or focus group, the idea is the same - market research companies want your opinion and are willing to give you cash and free ...
What Is An Inheritance Tax And When Is It Applied?
When an individual passes, on the federal government imposes an estate tax. This estate tax only applies to estate properties that are over one million fifty thousand dollars. The federal government is still likely to tax an estate even if all or ...
When A Two-Salary Income Fails
While this may not apply to everyone, you may find that a second salary brings in substantially less than you thought it would. In the beginning, Rachael thought that since she and her husband were just about breaking even as a couple, that staying home ...
|
|
|
| |
In the rush to get tax returns prepared and filed by April
15th, many overpay their taxes. Following are a few tax
reduction tips that could help you save a bundle.
Tax Credit For Starting A Small Business Pension Plan
Establishing a pension plan can help you retain important
employees. What many business owners don't realize is a tax
credit can be claimed if the business has 100 or fewer
employees. Meet this requirement and you can take a tax
credit of up to $500 in each of the first three years of the
plan. Tax credits are extremely valuable because they are
deducted directly from the taxes you owe, not gross
revenues.
The credit is 50% of certain start up costs you incur in
each of the first three years. The costs include the
expenses incurred in establishing and maintaining the plan.
They also include the cost of any educational retirement
planning programs you provide for employees.
For example, first assume that you spent $1,500 starting a
pension plan for your employees in 2004. Next assume that
you will spend $1,200 in both 2005 and 2006 for maintaining
the program and educating your employees. In this scenario,
you would be eligible to claim a tax credit of $500 in 2004,
2005 and 2006.
Personal Loans To Business
Many business owners lose track of loans they make to their
business. As a result, they incorrectly classify the
proceeds of the loan as part of their gross revenues. This
artificially raises the gross revenues of the business and
adds to the tax liability. Closely review your records for
2004 to make sure you are not making this mistake. Pay
particular attention to charges on personal credit cards.
You will be surprised how quickly the numbers add up.
SUV Deduction Wounded, But Still Alive
Much has been made about the “SUV Tax Deduction” that
allowed purchasers of SUVs over 6,000 pounds to immediately
deduct up to $100,000 of the cost. Many mistakenly believe
that the American Jobs Creation Act of 2004 eliminated this
deduction. It did not. Instead, it reduced the deduction to
$25,000 with the remaining amount allocated to depreciation.
This is still a significant immediate deduction. If you
purchased a non-SUV truck that weighed over 6,000 pounds in
2004, you are not restricted to a “mere” $25,000 deduction.
Tsunami Relief Contributions Paid in 2005
Millions of Americans contributed to charitable
organizations providing relief to Tsunami victims.
Typically, charitable contributions are deducted in the year
they are made. New legislation, however, allows you to
deduct Tsunami contributions you made in January 2005 on
your 2004 tax returns. Alternatively, you can wait and
deduct the donation on 2005 returns. Unfortunately, you
cannot deduct the contribution on both!
Sales Tax Deduction
If you itemize deductions, you have a choice of deducting
your state and local income taxes OR your state and local
sales tax. This option is available for the 2004 and 2005
tax years. If you live in a state that does not collect
income tax, the optional sales tax deduction should be
claimed for significant tax savings. See IRS Publication 600
for more information.
Deduction for Discrimination Lawsuit Costs
If you were required to pay attorney's fees and court costs
associated with a discrimination lawsuit, you may be able to
claim a tax deduction. The deduction is available only for
costs and fees incurred after October 22, 2004 in relation
to a judgment and settlement. The deduction is not limited
by the alternative minimum tax. Realistically, this
deduction will be more viable for the 2005 tax year, but a
few taxpayers may be eligible this year.
There are numerous deductions and credits available if you
take the time to look for them. Taxes can be confusing, but
the savings justify the time and effort of finding all
available deductions and credits.
About the Author
Richard Chapo is CEO of Business Tax Recovery - Obtaining tax refunds for small businesses by finding
overlooked tax deductions and credits through a free tax return review.
|
|
|
|
|
|
|
