Year-End Smart Small Business Tax Moves
With just six more weeks to go until 2015 is rung in, small business owners and managers can take simple steps now to minimize their tax bill next April, according to business advisory services firm Skoda Minotti.
Below are five ideas small business owners and managers can consider from now until December 31:
- Make those needed office or plant repairs. For the most part, expenses for minor business premises repairs are currently deductible.
- Keep an eye on equipment purchases. Currently, the maximum Section 179 allowance made for qualified property placed in service remains at $25,000 versus $500,000 in 2013. Also, the â€śbonus depreciationâ€ť tax break expired after 2013. If youâ€™re considering equipment purchases, stay close to the $25,000 mark, but should Congress raise the limit, be ready to purchase that piece of equipment youâ€™ve had your eye on.
- Bad debt deductions. Uncle Sam may allow you to deduct outstanding business debts, but you have to prove youâ€™ve made good-faith efforts to collect. To qualify, step up collection efforts before year-end and, of course, keep detailed records, including e-mails and all correspondence.
- Launch a new venture. You may be able to deduct up to $5,000 of qualified start-up expenses for a new business, with any excess amortized over 180 months. To qualify, the venture must launch before year end and be an ongoing activity.
- Purchase a company SUV. Under current rules, if a vehicle is purchased and used for business driving, the first-year depreciation deduction is limited by â€śluxury carâ€ť rules. However, these rules donâ€™t apply to certain heavy-duty vehicles, including SUVs. The deduction in these cases goes up to $25,000.
To read the complete list of tips, click here. Check with your professional tax advisor to explore these tips and to see if you qualify for other deductions.