Lamarwaltersuccess Blog

December 29, 2011

“Six Year-End Tax-Saving Tips”

Filed under: Business, Inspirational, Motivational, Sucessful, Uncategorized — lamarwalter @ 12:03 am

By: Mark J. Kohler

The last days of 2011 are ticking away, and that means there are plenty of year-end tax strategy articles out there.

I say, “Give me a break!” Most of the advice involves investing in your Individual Retirement Account or harvesting losses in your stock portfolio. The so-called tax gurus ignore important steps you can still take that will save you money on your tax filings.

Small-business owners really do have an advantage over average taxpayers, so don’t let the opportunity to save money slip by.

Here are some to-do items to consider in the next week:

• Shift income and expenses. Most small-business owners use cash-based accounting. Simply put, that means you don’t pay taxes on income until you receive it, and you don’t get to claim tax write-offs until you spend the money. So if you can, tell your customers they don’t have to rush to pay you before January 1. And pay your January phone bill early. Run the numbers.

• Buy needed equipment now. Federal economic stimulus measures involving Section 179 and the related “bonus depreciation” can allow you to write off the entire purchase price of a smartphone or a copying machine. But the tax benefits will be greatly reduced after December 31, and then mostly go away after 2012. If you’ve been holding off on buying something for the business, do it now.

If you are in the market for a new business vehicle, there are some incredible tax incentives before December 31. Don’t think the vehicle has to be new, either. The federal depreciation deduction on an SUV could be up to $25,000, and even more for large trucks or RVs used for business purposes. If you are a little more “green” in your tastes, the tax credits for electric vehicles are fantastic, too, with a federal credit of up to $7,500.

• Pay your family members. Has Junior been sweeping the store this year for allowance money? You still have time to put your child or other family members on the payroll or issue them a 1099 as a general contractor. Then, you can count the money you gave them as a business expense. Better yet, maybe give your new worker a year-end bonus in the next week. Not only do you get to deduct what you paid your family member, but you also will pay less tax on the amount. Your child will owe a tiny amount of federal income tax, but far less than you would pay at your higher tax rate if you kept the money for yourself.

• Make your holiday vacation pay for itself. If you’re sitting on the beach in Hawaii reading this article on your iPad, something is wrong with you. But I’d say something is really wrong with you if you haven’t scheduled lunch with a client or a similar meeting that will allow you to write off some holiday trip costs as business expenses.

• Set up a 401(k). A 401(k) is far more powerful than an IRA. A person under 50 could save up to $49,000 in a 401(k) this year; the limit for an IRA was $5,000. A self-employed person still has plenty of time to shelter a great deal of retirement savings from taxes. As with an IRA, you can generally make 2011 deposits until the April tax-filing deadline. However, the 401(k) must be created by December 31.

I know the following sounds a bit self-serving, coming from an accountant and lawyer. But it could prove very valuable to schedule a consultation with your accountant before year-end. It’s a busy time of year for everyone, but the effort can be well worth the investment of time and money.

Advertisements

4 Comments »

  1. Thanks for that info and Happy New Yr.

    Comment by Marvin — December 30, 2011 @ 12:23 pm

  2. Hi! I just wanted to ask if you ever have any
    problems with hackers? My last blog (wordpress) was hacked
    and I ended up losing months of hard work due to no data backup.
    Do you have any solutions to prevent hackers?

    Comment by aglomarmur parapety wewnetrzne — February 27, 2014 @ 2:09 pm

  3. For any company, while retaining existing customers is important, acquiring new ones is also vital.

    However, they have done a good job for me in the past).
    Online shoppers should know that Vistaprint promo code tagged
    on wide array of best graphic design services.

    Comment by Vistaprint promo codes — March 19, 2014 @ 7:21 pm

  4. I’m gone to say to my lttle brother, that he should also pay
    a quick visit this weblog on regular basis to obtain updated from newest
    gossip.

    Comment by http://Technorati.com/people/KrHinds/ — March 24, 2014 @ 5:42 am


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: