1. Deductions for Travel

If you fly somewhere on business and you are not reimbursed for that expense, you can claim a write-off. As always, keep a detailed log or diary of your expenses. You can claim associated expenses such as taxi fares, subway tokens — and even stuff like dry-cleaning expenses. As for meals, you can write off half your meal expenses.

You can even write off expenses you incur for employees and/or business associates that you are traveling with (friends and family members are out). Consult your tax professional for more details.

2. Deductions for Software

If your business uses customized computer software you can claim the expense of that software as long as you spread out the deduction over three years.

But…Section 179 of the IRS rules allow you take the write-off on computer software all in the first year, IF that software is “off-the-shelf,” in other words, something like Microsoft Office.

3. Deductions for Charitable Contributions

When discussing this kind of deduction, the rules are a bit complicated. For starters, if your small business is a partnership, or if it is classified as an S corporation, or if you’re organized as a limited liability company, your members will be filing the company’s taxes on your personal forms — including donations to charity that you have made. In other words, charitable donations are a “pass-through,” as is the case with the company’s income. C corporations are entitled to corporate deductions.

[Note: if you don’t know what kind of classification you fall under, consult your tax professional or your attorney.]

OK, then, now that is out of the way, here are the rules:

You, as an individual, can write off 30-50% of your adjusted gross income as long as the organization you are donating to qualifies as a 501(c)(3)charity or foundation.

A corporation can write off up to 10% of their taxable income.

If you donate more than $250 you’ll need to have a letter from that organization that confirms your contribution. Make sure you read IRS Publication 551 as well as the rules set forth in Section 179. Consult your tax professional for more details.

4. Deductions for Advertising

It’s true: you’ll either advertise your company now, or when you have your going out of business sale. Either way, advertising and marketing expenses are deductible — if they are directly related to your business. They fall under the “Miscellaneous” category of write-offs. Check out IRS Publication 535 and consult your tax professional for more details.

5. Deductions for Legal and Professional Fees

OK, I saved this one for last because it relates directly to the thing I’ve said many times already: “Consult your tax professional for more details.”

Fact is, fees you pay to your attorney and/or accountant are deductible — under certain conditions. For example, you can’t write off professional fees you expend when you buy a business asset (e.g., equipment). In that case, you include the charges in the cost of the purchase.

Sole proprietors can take a write-off on fees paid for tax prep. Use Schedule C or Schedule C-EZ. In addition, uses Schedule A of your 1040. Make sure you check with your tax preparer for complete details.

Conclusion

The US government wants you to succeed in business. So they offer lots of latitude in claiming expense write-offs. So make sure you get what’s yours.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For More Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

Here are some deductions that you should think about when doing your business tax planning.

Here’s some allowable tax deductions that you don’t want to miss.

1. Deductions for Start-up Costs

In your first year of small business, you are allowed to write off as much as $5,000 in start-up costs. In addition you can write off an additional $5,000 in organizational costs. Not only that: you also have the option of spread out expenses not deducted in the first year over a period of 15 years, beginning with when you opened your business. Eligible costs include things like market research, company advertising, training of your employees, travel for business, legal advice and other costs. Consult your tax professional for more details.

2. Deductions for Education

First stop: IRS Publication 970, “Business Deductions for Work-Related Education.” For the most part, you can write off expenses related to your employees’ education if the courses relate to their jobs.

In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction. The bad news is that you can’t take a write-off on any expense related to training in a new, unrelated field. A couple of other things to remember: You can also claim a write-off if you are self-employed. Deductions also include the cost of getting to and from the classes. Consult your tax professional for more details.

3. Deductions for Vehicles

Be careful here: the rules for deducting automobile expenses are pretty detailed and the Feds pay close attention to anyone claiming these deductions. So, for starters, keep clear and concise records. You can deduct expenses two ways:

The first option is to claim a deduction by counting how many miles you drove while on business. Currently, you can claim a deduction of 44.5 cents per mile. Check to make sure that is the current amount, as it does change occasionally. The other option is to track your total expenses incurred on things like gasoline, repairs and maintenance.

Remember: keep good records. If you’re using your own personal vehicle for your small business, make sure you separate the times you use it for business from the times you do not. Include dates, destinations, purpose of the travel, etc. Read IRS Publication 463 for more info. And here’s an important point: if your employees use a business vehicle while running personal errands, for example, you have have to show this as income to them on their W-2.

A couple of other things to remember: If you bought a new (or previously owned) car, you can take a write-off. You’ll have to decide if it’s better to take it in one single deduction or spread out over a period of time through depreciation. And if that car is a hybrid, you might be eligible for a tax credit. Read IRS Publication 8910 for more details. As always, consult your tax professional for more details.

4. Deductions for Equipment

You have the ability to take a write-off for small business equipment purchases. The write-off can be pretty large — in 2006 it amounted to over $100 thousand. And the equipment can be used; the only requirement is that you use it at least half the time for your company. Allowable equipment includes things like computer hardware, machinery, office furniture, automobiles and other related equipment.

Make sure you read a current copy of IRS Form 4562 before planning your tax strategy on this point. If you decide you are not going to claim this write-off immediately, you can spread it out over a period of years by claiming depreciation on that equipment. Consult your tax professional for more details.

5. Deductions for Entertainment

The IRS definition of entertainment is pretty flexible. Generally speaking, if you attend a business meeting, for example, and you are not reimbursed for the expenses, you’re allowed to write off up to half the entertainment expense. They do caution you that the “entertainment” must be in a business context. This means if you go to a seminar or conference, that’s OK. Also, the entertainment should come immediately before or after the meeting. You get a break if you are self-employed; then, the 50 percent deduction cut-off does not pertain to you. Consult your tax professional for more details.

In Conclusion

The Internal Revenue Service is pretty generous in offering your business a whole range of tax write-offs. Just make sure you talk to your tax attorney or CPA to get the most current rules and regulations before you begin planning.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For more info on Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

1. Travel Expense Write-offs

Your plane fare is a deductible expense — if you have not received a reimbursement from your business. Other transportation expenses are also deductible such as taxi fares, bus, and subway tokens. Associated expenses like dry-cleaning is also deductible. Lastly, meals are an allowable expense, but only half the amount you spend can be deducted.

You can even write off expenses you incur for employees and/or business associates that you are traveling with (friends and family members are out). Consult your tax professional for more details.

2. Deductions for Software

If your business uses customized computer software you can claim the expense of that software as long as you spread out the deduction over three years.

But…Section 179 of the IRS rules allow you take the write-off on computer software all in the first year, IF that software is “off-the-shelf,” in other words, something like Microsoft Office.

3. Deductions for Charitable Contributions

How you handle these deductions depends on how your company is organized. If you are a C-corp, you’ll claim the deduction on your business tax return. However, if your company is a partnership, or an S-corp or LLC, then you’ll take the deduction as a “pass-through” on your personal tax return. This is the same as how you report company income.

If you’re not sure how your company is organized, call your CPA or tax attorney; or call the state in which your company was originally chartered.

Now that we’ve cleared that up, here are some more rules:

You, as an individual, can write off 30-50% of your adjusted gross income as long as the organization you are donating to qualifies as a 501(c)(3)charity or foundation.

A corporation can write off up to 10% of their taxable income.

If you donate more than $250 you’ll need to have a letter from that organization that confirms your contribution. Make sure you read IRS Publication 551 as well as the rules set forth in Section 179. Consult your tax professional for more details.

4. Deductions for Advertising

It’s true: you’ll either advertise your company now, or when you have your going out of business sale. Either way, advertising and marketing expenses are deductible — if they are directly related to your business. They fall under the “Miscellaneous” category of write-offs. Check out IRS Publication 535 and consult your tax professional for more details.

5. Deductions for Legal and Professional Fees

OK, I saved this one for last because it relates directly to the thing I’ve said many times already: “Consult your tax professional for more details.”

Fact is, fees you pay to your attorney and/or accountant are deductible — under certain conditions. For example, you can’t write off professional fees you expend when you buy a business asset (e.g., equipment). In that case, you include the charges in the cost of the purchase.

If you are a sole proprietor you can deduct tax preparation fees on your Schedule C or Schedule C-EZ. Also for sole proprietors, use your Schedule A of your 1040. Consult your tax professional for more details — and don’t forget to ask them about deducting their fees from your tax return.

Conclusion

The US government wants you to succeed in business. So they offer lots of latitude in claiming expense write-offs. So make sure you get what’s yours.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For More Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

Here are some deductions that you should think about when doing your business tax planning.

Here’s some allowable tax deductions that you don’t want to miss.

1. Deductions for Start-up Costs

In your first year of small business, you are allowed to write off as much as $5,000 in start-up costs. In addition you can write off an additional $5,000 in organizational costs. Not only that: you also have the option of spread out expenses not deducted in the first year over a period of 15 years, beginning with when you opened your business. Eligible costs include things like market research, company advertising, training of your employees, travel for business, legal advice and other costs. Consult your tax professional for more details.

2. Deductions for Education

First stop: IRS Publication 970, “Business Deductions for Work-Related Education.” For the most part, you can write off expenses related to your employees’ education if the courses relate to their jobs.

In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction. The bad news is that you can’t take a write-off on any expense related to training in a new, unrelated field. A couple of other things to remember: You can also claim a write-off if you are self-employed. Deductions also include the cost of getting to and from the classes. Consult your tax professional for more details.

3. Deductions for Vehicles

Be careful here: the rules for deducting automobile expenses are pretty detailed and the Feds pay close attention to anyone claiming these deductions. So, for starters, keep clear and concise records. You can deduct expenses two ways:

The first option is to claim a deduction by counting how many miles you drove while on business. Currently, you can claim a deduction of 44.5 cents per mile. Check to make sure that is the current amount, as it does change occasionally. The other option is to track your total expenses incurred on things like gasoline, repairs and maintenance.

Remember: keep good records. If you’re using your own personal vehicle for your small business, make sure you separate the times you use it for business from the times you do not. Include dates, destinations, purpose of the travel, etc. Read IRS Publication 463 for more info. And here’s an important point: if your employees use a business vehicle while running personal errands, for example, you have have to show this as income to them on their W-2.

A couple of other things to remember: If you bought a new (or previously owned) car, you can take a write-off. You’ll have to decide if it’s better to take it in one single deduction or spread out over a period of time through depreciation. And if that car is a hybrid, you might be eligible for a tax credit. Read IRS Publication 8910 for more details. As always, consult your tax professional for more details.

4. Equipment Deductions

If you have purchased new or used business-related equipment, you can take a write-off on it. In 2006, the upper limit for purchases was $100 thousand, so you have quite a bit of latitude here. The key is to be able to show that 50% or more of the equipment’s usage was business related.

Qualifying equipment includes computer hardware, furniture for your office, business machinery, cars and other similar equipment.

Make sure you read a current copy of IRS Form 4562 before planning your tax strategy on this point. If you decide you are not going to claim this write-off immediately, you can spread it out over a period of years by claiming depreciation on that equipment. Consult your tax professional for more details.

5. Deductions for Entertainment

The IRS definition of entertainment is pretty flexible. Generally speaking, if you attend a business meeting, for example, and you are not reimbursed for the expenses, you’re allowed to write off up to half the entertainment expense. They do caution you that the “entertainment” must be in a business context. This means if you go to a seminar or conference, that’s OK. Also, the entertainment should come immediately before or after the meeting. You get a break if you are self-employed; then, the 50 percent deduction cut-off does not pertain to you. Consult your tax professional for more details.

Conclusion

There are lots of ways to reduce your small business taxes. Generally it involves increasing the number and amount of allowable business deductions. Consult your tax professional for more details.
© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For more info on Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

1. Travel Expense Deductions

When flying on business, keep a detailed record of all your expenses. You can claim a deduction on your plane ticket, for example, if your business has not reimbursed you for it. Also, you can write off things like cab fare and mass transit tokens. You can even expense dry-cleaning. But for meals, you are only allowed claim a deduction for half the cost your incur for eating out.

You can even write off expenses you incur for employees and/or business associates that you are traveling with (friends and family members are out). Consult your tax professional for more details.

2. Deductions for Software

If your business uses customized computer software you can claim the expense of that software as long as you spread out the deduction over three years.

But…Section 179 of the IRS rules allow you take the write-off on computer software all in the first year, IF that software is “off-the-shelf,” in other words, something like Microsoft Office.

3. Deductions for Charitable Contributions

When discussing this kind of deduction, the rules are a bit complicated. For starters, if your small business is a partnership, or if it is classified as an S corporation, or if you’re organized as a limited liability company, your members will be filing the company’s taxes on your personal forms — including donations to charity that you have made. In other words, charitable donations are a “pass-through,” as is the case with the company’s income. C corporations are entitled to corporate deductions.

[Note: if you don’t know what kind of classification you fall under, consult your tax professional or your attorney.]

OK, then, now that is out of the way, here are the rules:

You, as an individual, can write off 30-50% of your adjusted gross income as long as the organization you are donating to qualifies as a 501(c)(3)charity or foundation.

A corporation can write off up to 10% of their taxable income.

If you donate more than $250 you’ll need to have a letter from that organization that confirms your contribution. Make sure you read IRS Publication 551 as well as the rules set forth in Section 179. Consult your tax professional for more details.

4. Deductions for Advertising

It’s true: you’ll either advertise your company now, or when you have your going out of business sale. Either way, advertising and marketing expenses are deductible — if they are directly related to your business. They fall under the “Miscellaneous” category of write-offs. Check out IRS Publication 535 and consult your tax professional for more details.

5. Deductions for Legal and Professional Fees

OK, I saved this one for last because it relates directly to the thing I’ve said many times already: “Consult your tax professional for more details.”

Fact is, fees you pay to your attorney and/or accountant are deductible — under certain conditions. For example, you can’t write off professional fees you expend when you buy a business asset (e.g., equipment). In that case, you include the charges in the cost of the purchase.

If your business is organized with you as the sole proprietor, you can take a deduction for the costs you incur on tax preparation. You would claim the expense on your Schedule C or C-EZ. Not only that: you would use your Schedule A from your Form 1040. Call your CPA or tax professional for all the details.

Last but not least:

Uncle Sam wants you to be a success at business. It’s good for the economy when you are. That said, they are more than willing to give you plenty of ways to reduce your tax liability through the use of write-offs and deductions. You have a great opportunity — if you choose to use it.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For More Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

1. Travel Expense Write-offs

Your plane fare is a deductible expense — if you have not received a reimbursement from your business. Other transportation expenses are also deductible such as taxi fares, bus, and subway tokens. Associated expenses like dry-cleaning is also deductible. Lastly, meals are an allowable expense, but only half the amount you spend can be deducted.

You can even write off expenses you incur for employees and/or business associates that you are traveling with (friends and family members are out). Consult your tax professional for more details.

2. Deductions for Software

If your business uses customized computer software you can claim the expense of that software as long as you spread out the deduction over three years.

But…Section 179 of the IRS rules allow you take the write-off on computer software all in the first year, IF that software is “off-the-shelf,” in other words, something like Microsoft Office.

3. Deductions for Charitable Contributions

When discussing this kind of deduction, the rules are a bit complicated. For starters, if your small business is a partnership, or if it is classified as an S corporation, or if you’re organized as a limited liability company, your members will be filing the company’s taxes on your personal forms — including donations to charity that you have made. In other words, charitable donations are a “pass-through,” as is the case with the company’s income. C corporations are entitled to corporate deductions.

[Note: if you don’t know what kind of classification you fall under, consult your tax professional or your attorney.]

OK, then, now that is out of the way, here are the rules:

You, as an individual, can write off 30-50% of your adjusted gross income as long as the organization you are donating to qualifies as a 501(c)(3)charity or foundation.

A corporation can write off up to 10% of their taxable income.

If you donate more than $250 you’ll need to have a letter from that organization that confirms your contribution. Make sure you read IRS Publication 551 as well as the rules set forth in Section 179. Consult your tax professional for more details.

4. Deductions for Advertising

It’s true: you’ll either advertise your company now, or when you have your going out of business sale. Either way, advertising and marketing expenses are deductible — if they are directly related to your business. They fall under the “Miscellaneous” category of write-offs. Check out IRS Publication 535 and consult your tax professional for more details.

5. Deductions for Legal and Professional Fees

OK, I saved this one for last because it relates directly to the thing I’ve said many times already: “Consult your tax professional for more details.”

Fact is, fees you pay to your attorney and/or accountant are deductible — under certain conditions. For example, you can’t write off professional fees you expend when you buy a business asset (e.g., equipment). In that case, you include the charges in the cost of the purchase.

If you are a sole proprietor you can deduct tax preparation fees on your Schedule C or Schedule C-EZ. Also for sole proprietors, use your Schedule A of your 1040. Consult your tax professional for more details — and don’t forget to ask them about deducting their fees from your tax return.

Conclusion

The US government wants you to succeed in business. So they offer lots of latitude in claiming expense write-offs. So make sure you get what’s yours.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For More Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

Here is a list of them. Check to see if you have included these in your tax planning.

1. Deductions for Start-up Costs

In your first year of small business, you are allowed to write off as much as $5,000 in start-up costs. In addition you can write off an additional $5,000 in organizational costs. Not only that: you also have the option of spread out expenses not deducted in the first year over a period of 15 years, beginning with when you opened your business. Eligible costs include things like market research, company advertising, training of your employees, travel for business, legal advice and other costs. Consult your tax professional for more details.

2. Deductions for Education

First stop: IRS Publication 970, “Business Deductions for Work-Related Education.” For the most part, you can write off expenses related to your employees’ education if the courses relate to their jobs.

In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction. The bad news is that you can’t take a write-off on any expense related to training in a new, unrelated field. A couple of other things to remember: You can also claim a write-off if you are self-employed. Deductions also include the cost of getting to and from the classes. Consult your tax professional for more details.

3. Vehicle Deductions

You’ll want to proceed with some caution when it comes to claiming these deductions. This is because the rules are pretty specific and the IRS looks carefully at any business that claims them. Tip #1: keep detailed logs and diaries of your expenses. You can use either one of these two different methods when calculating your deductions:

Option One: count your vehicle’s business mileage and then claim a deduction of 44.5 cents per mile. If you plan on doing this, make sure you know the correct rate, as it does change from time to time.

Option Two: write down all your business’ out-of-pocket vehicle expenses such as how much you paid for gas, as well as repairs and maintenance.

Remember: keep good records. If you’re using your own personal vehicle for your small business, make sure you separate the times you use it for business from the times you do not. Include dates, destinations, purpose of the travel, etc. Read IRS Publication 463 for more info. And here’s an important point: if your employees use a business vehicle while running personal errands, for example, you have have to show this as income to them on their W-2.

A couple of other things to remember: If you bought a new (or previously owned) car, you can take a write-off. You’ll have to decide if it’s better to take it in one single deduction or spread out over a period of time through depreciation. And if that car is a hybrid, you might be eligible for a tax credit. Read IRS Publication 8910 for more details. As always, consult your tax professional for more details.

4. Deductions for Equipment

You have the ability to take a write-off for small business equipment purchases. The write-off can be pretty large — in 2006 it amounted to over $100 thousand. And the equipment can be used; the only requirement is that you use it at least half the time for your company. Allowable equipment includes things like computer hardware, machinery, office furniture, automobiles and other related equipment.

Make sure you read a current copy of IRS Form 4562 before planning your tax strategy on this point. If you decide you are not going to claim this write-off immediately, you can spread it out over a period of years by claiming depreciation on that equipment. Consult your tax professional for more details.

5. Deductions for Entertainment

The IRS definition of entertainment is pretty flexible. Generally speaking, if you attend a business meeting, for example, and you are not reimbursed for the expenses, you’re allowed to write off up to half the entertainment expense. They do caution you that the “entertainment” must be in a business context. This means if you go to a seminar or conference, that’s OK. Also, the entertainment should come immediately before or after the meeting. You get a break if you are self-employed; then, the 50 percent deduction cut-off does not pertain to you. Consult your tax professional for more details.

In Conclusion

The Internal Revenue Service is pretty generous in offering your business a whole range of tax write-offs. Just make sure you talk to your tax attorney or CPA to get the most current rules and regulations before you begin planning.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For more info on Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

1. Deductions for Travel

If you fly somewhere on business and you are not reimbursed for that expense, you can claim a write-off. As always, keep a detailed log or diary of your expenses. You can claim associated expenses such as taxi fares, subway tokens — and even stuff like dry-cleaning expenses. As for meals, you can write off half your meal expenses.

You can even write off expenses you incur for employees and/or business associates that you are traveling with (friends and family members are out). Consult your tax professional for more details.

2. Deductions for Software

If your business uses customized computer software you can claim the expense of that software as long as you spread out the deduction over three years.

But…Section 179 of the IRS rules allow you take the write-off on computer software all in the first year, IF that software is “off-the-shelf,” in other words, something like Microsoft Office.

3. Deductions for Charitable Contributions

When discussing this kind of deduction, the rules are a bit complicated. For starters, if your small business is a partnership, or if it is classified as an S corporation, or if you’re organized as a limited liability company, your members will be filing the company’s taxes on your personal forms — including donations to charity that you have made. In other words, charitable donations are a “pass-through,” as is the case with the company’s income. C corporations are entitled to corporate deductions.

[Note: if you don’t know what kind of classification you fall under, consult your tax professional or your attorney.]

OK, then, now that is out of the way, here are the rules:

You, as an individual, can write off 30-50% of your adjusted gross income as long as the organization you are donating to qualifies as a 501(c)(3)charity or foundation.

A corporation can write off up to 10% of their taxable income.

If you donate more than $250 you’ll need to have a letter from that organization that confirms your contribution. Make sure you read IRS Publication 551 as well as the rules set forth in Section 179. Consult your tax professional for more details.

4. Deductions for Advertising

It’s true: you’ll either advertise your company now, or when you have your going out of business sale. Either way, advertising and marketing expenses are deductible — if they are directly related to your business. They fall under the “Miscellaneous” category of write-offs. Check out IRS Publication 535 and consult your tax professional for more details.

5. Deductions for Legal and Professional Fees

OK, I saved this one for last because it relates directly to the thing I’ve said many times already: “Consult your tax professional for more details.”

Fact is, fees you pay to your attorney and/or accountant are deductible — under certain conditions. For example, you can’t write off professional fees you expend when you buy a business asset (e.g., equipment). In that case, you include the charges in the cost of the purchase.

Sole proprietors can take a write-off on fees paid for tax prep. Use Schedule C or Schedule C-EZ. In addition, uses Schedule A of your 1040. Make sure you check with your tax preparer for complete details.

Conclusion

The US government wants you to succeed in business. So they offer lots of latitude in claiming expense write-offs. So make sure you get what’s yours.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For More Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

Here is a list of them. Check to see if you have included these in your tax planning.

1. Deductions for Start-up Costs

In your first year of small business, you are allowed to write off as much as $5,000 in start-up costs. In addition you can write off an additional $5,000 in organizational costs. Not only that: you also have the option of spread out expenses not deducted in the first year over a period of 15 years, beginning with when you opened your business. Eligible costs include things like market research, company advertising, training of your employees, travel for business, legal advice and other costs. Consult your tax professional for more details.

2. Deductions for Education

First stop: IRS Publication 970, “Business Deductions for Work-Related Education.” For the most part, you can write off expenses related to your employees’ education if the courses relate to their jobs.

In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction. The bad news is that you can’t take a write-off on any expense related to training in a new, unrelated field. A couple of other things to remember: You can also claim a write-off if you are self-employed. Deductions also include the cost of getting to and from the classes. Consult your tax professional for more details.

3. Vehicle Deductions

You’ll want to proceed with some caution when it comes to claiming these deductions. This is because the rules are pretty specific and the IRS looks carefully at any business that claims them. Tip #1: keep detailed logs and diaries of your expenses. You can use either one of these two different methods when calculating your deductions:

Option One: count your vehicle’s business mileage and then claim a deduction of 44.5 cents per mile. If you plan on doing this, make sure you know the correct rate, as it does change from time to time.

Option Two: write down all your business’ out-of-pocket vehicle expenses such as how much you paid for gas, as well as repairs and maintenance.

Remember: keep good records. If you’re using your own personal vehicle for your small business, make sure you separate the times you use it for business from the times you do not. Include dates, destinations, purpose of the travel, etc. Read IRS Publication 463 for more info. And here’s an important point: if your employees use a business vehicle while running personal errands, for example, you have to show this as income to them on their W-2.

A couple of other things to remember: If you bought a new (or previously owned) car, you can take a write-off. You’ll have to decide if it’s better to take it in one single deduction or spread out over a period of time through depreciation. And if that car is a hybrid, you might be eligible for a tax credit. Read IRS Publication 8910 for more details. As always, consult your tax professional for more details.

4. Write-offs for Business Equipment

If you purchased business equipment, new or used, you can claim a business deduction. Amounts up to $100 thousand are allowable. Just make sure you can show that at least 50% of the time, the equipment was used for business-related activities. Allowable equipment includes cars, office furniture, hardware for your computers, and business machinery.

Make sure you read a current copy of IRS Form 4562 before planning your tax strategy on this point. If you decide you are not going to claim this write-off immediately, you can spread it out over a period of years by claiming depreciation on that equipment. Consult your tax professional for more details.

5. Deductions for Entertainment

The IRS definition of entertainment is pretty flexible. Generally speaking, if you attend a business meeting, for example, and you are not reimbursed for the expenses, you’re allowed to write off up to half the entertainment expense. They do caution you that the “entertainment” must be in a business context. This means if you go to a seminar or conference, that’s OK. Also, the entertainment should come immediately before or after the meeting. You get a break if you are self-employed; then, the 50 percent deduction cut-off does not pertain to you. Consult your tax professional for more details.

Summary

The IRS provides you with lots of possible ways to reduce your small business taxes via tax write-offs. Talk to your tax professionals to get the most up-to-date information.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For more info on Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.

Here are some deductions that you should think about when doing your business tax planning.

Here’s some allowable tax deductions that you don’t want to miss.

1. Deductions for Start-up Costs

In your first year of small business, you are allowed to write off as much as $5,000 in start-up costs. In addition you can write off an additional $5,000 in organizational costs. Not only that: you also have the option of spread out expenses not deducted in the first year over a period of 15 years, beginning with when you opened your business. Eligible costs include things like market research, company advertising, training of your employees, travel for business, legal advice and other costs. Consult your tax professional for more details.

2. Deductions for Education

First stop: IRS Publication 970, “Business Deductions for Work-Related Education.” For the most part, you can write off expenses related to your employees’ education if the courses relate to their jobs.

In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction. The bad news is that you can’t take a write-off on any expense related to training in a new, unrelated field. A couple of other things to remember: You can also claim a write-off if you are self-employed. Deductions also include the cost of getting to and from the classes. Consult your tax professional for more details.

3. Vehicle Deductions

You’ll want to proceed with some caution when it comes to claiming these deductions. This is because the rules are pretty specific and the IRS looks carefully at any business that claims them. Tip #1: keep detailed logs and diaries of your expenses. You can use either one of these two different methods when calculating your deductions:

Option One: count your vehicle’s business mileage and then claim a deduction of 44.5 cents per mile. If you plan on doing this, make sure you know the correct rate, as it does change from time to time.

Option Two: write down all your business’ out-of-pocket vehicle expenses such as how much you paid for gas, as well as repairs and maintenance.

Remember: keep good records. If you’re using your own personal vehicle for your small business, make sure you separate the times you use it for business from the times you do not. Include dates, destinations, purpose of the travel, etc. Read IRS Publication 463 for more info. And here’s an important point: if your employees use a business vehicle while running personal errands, for example, you have have to show this as income to them on their W-2.

A couple of other things to remember: If you bought a new (or previously owned) car, you can take a write-off. You’ll have to decide if it’s better to take it in one single deduction or spread out over a period of time through depreciation. And if that car is a hybrid, you might be eligible for a tax credit. Read IRS Publication 8910 for more details. As always, consult your tax professional for more details.

4. Deductions for Equipment

You have the ability to take a write-off for small business equipment purchases. The write-off can be pretty large — in 2006 it amounted to over $100 thousand. And the equipment can be used; the only requirement is that you use it at least half the time for your company. Allowable equipment includes things like computer hardware, machinery, office furniture, automobiles and other related equipment.

Make sure you read a current copy of IRS Form 4562 before planning your tax strategy on this point. If you decide you are not going to claim this write-off immediately, you can spread it out over a period of years by claiming depreciation on that equipment. Consult your tax professional for more details.

5. Deductions for Entertainment

The IRS definition of entertainment is pretty flexible. Generally speaking, if you attend a business meeting, for example, and you are not reimbursed for the expenses, you’re allowed to write off up to half the entertainment expense. They do caution you that the “entertainment” must be in a business context. This means if you go to a seminar or conference, that’s OK. Also, the entertainment should come immediately before or after the meeting. You get a break if you are self-employed; then, the 50 percent deduction cut-off does not pertain to you. Consult your tax professional for more details.

Conclusion

There are lots of ways to reduce your small business taxes. Generally it involves increasing the number and amount of allowable business deductions. Consult your tax professional for more details.

© 2007 Ara Rubyan. This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 License. You have permission to use it if you include the resource information below.

For more info on Small Business Tax Help, visit Ara Rubyan’s Your Tax Help Online

Ara Rubyan isn’t an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.

Now, he’s put all his research (so far) in one convenient location and he’s sharing it with you, no strings attached. Visit his website. You’ll find:

• Lots of articles on various tax help topics;
• Videos;
• Interactive polls;
• Latest news on tax help resources;
• Your questions, answers and suggestions.

As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.