Six Keys to Maximizing Wealth for Small Business Owners-Key #3 Focus on Taxes
This is Key #3 of the Six Keys to Maximizing Wealth for Small Business Owners-Focus on Taxes. In this article I’ll discuss ideas that may improve your tax situation for your business. So let’s get started!
Two things are certain in life, death and taxes. Or so the saying goes. Business owners are faced with a maze of tax laws and regulations and they can be challenging. So tax planning becomes very important.
Tax planning is a year-round approach that is done while taking into consideration your entire business picture. The goal is to make sure that the tax strategies you use don’t undermine your other financial goals.
Seven ideas that may improve your tax situation:
1. Keep track of business interest expense deductions. Does your business need to borrow to finance growth or expansion or to meet other business needs? If so, you can deduct 100 percent of the trade or business interest expense you incur.
2. Deduct all business account fees. You can deduct all account fees that you pay to your service provider/administrator for company retirement plans or other services, as long as the costs are paid for separately by the business.
3. Deduct business equipment purchases. The Jobs and Growth Tax Relief Reconciliation Act of 2003 increases from $25,000 to $100,000 the amount of qualified property that business owners can choose to immediately deduct, rather than depreciate gradually. In addition, the phase-out threshold increases from $200,000 to $400,000 under the new law. These rules apply to property put in service during 2003, as well as 2004 and 2005, and the figures are indexed for inflation after 2003. Qualified property is defined as depreciable, tangible, personal property that is bought for use in the active conduct of your business. Off-the-shelf computer software is now included in the definition of qualified business property. You may also be able to treat monthly lease payments as operating expenses, depending on the type of lease. Whether it’s better to buy or lease new equipment depends on factors beyond tax considerations, so make sure to discuss you plans with your business adviser.
You guessed it, if you want all seven ideas that may improve your tax situation, you have to download my eBook Six Keys to Maximizing Wealth for Small Business Owners today. What are you waiting for?