Understanding the §179D Tax Deduction for Humans, Part 2
Examining the effects of the Inflation Reduction Act on §179D Welcome to part two of our series on the IRS Section 179D tax deduction. We explained how the §179D tax deduction works and who qualifies for it in part one. For this entry, we’ll take a look at the future of our plucky lil’ write-off […]
Understanding the §179D Tax Deduction for Humans, Part 1
Who qualifies for the $1.80 $1.88 $2.00 $5.00 per sq ft tax write-off? If you listen closely, you can hear it: The IRS Section 179D tax deduction is suddenly generating a lot of buzz. The provision, which provides incentives in the form of tax deductions to commercial building owners and designers of government-owned buildings who […]
Six Small Business Tax Strategies for the Entire Year
March 15th is just four days away so many of you amped for this first corporate deadline of the year. Tax planning gets a lot of attention during January – March time frame but what about the rest of the year? Should you be thinking about planning for three lousy months out of the year? Please.
But because the timing is not lost on us, we reached out to a CPA who has been around the block a time or two for some tax advice as we approach the corporate filing deadline.
Mike Callahan is a tax director at Spicer Jeffries LLP in Greenwood Village, Colorado. Mike has been sharing his tax wisdom with clients for over thirteen years with an expertise in securities taxation, organizational structure and international taxation of investment partnerships. Mike has been involved in many areas of tax research and planning, including advising broker-dealers and hedge funds, international taxation, multi-state tax planning and compliance and estate and financial planning.
Mike will be paying us a visit with some tax advice or the next week or so as the we head down the stretch in tax season 2010.
Starting off, he gave us six strategies for small businesses that you can keep in mind for yourself or your clients throughout the year, just not for year-end planning:
• Consider a 401(k) safe harbor – If your pension contributions are limited because your employees don’t contribute much to their accounts, contributing 3% of your employees’ compensation to their accounts allows you to maximize your contributions.
• Retirement Plan Credit – Small employers are eligible for a credit of up to $500 for 50% of the administrative cost of setting up a retirement plan.
• Section 179 – Deduct (instead of depreciating) the cost of equipment and furniture on up to $134,000 of additions in 2010 ($250,000 in 2009) under Section 179.
• Hire your children since you give them money anyway – Of course they do have to actually work. Their tax bracket is probably less than yours, some of the income is tax free and they are eligible for traditional or Roth IRA contributions.
• Watch out for the alternative minimum tax (AMT) – It impacts more and more people each year. Tax projections by your CPA are a must! It may be beneficial to defer some deductions until next year instead of paying them this year.
• Work from home? – If your home office is your principal place of business for administration and management of your company, a portion of your rent, utilities, maintenance, etc… are deductible. This also helps reduce your self employment tax.