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This page last updated on
August 14, 2005

Small Business Income Tax Guide
Business Tax Tips to Use on Your Tax Return
-- Summer 2005 Archive Articles
(NOTE: The tax information in the following articles was current as of the date on the page. Tax law may have changed since these articles were posted.)

Small Business Tax Tips on Business Entity Selection
Your Entity Choice Affects What Type and How Much Tax You Will Pay

One key decision for the owner of a new business is deciding upon the legal entity form to be adopted for the new business. Each form has its advantages and disadvantages. Here are some basic tips.
See the Full Article for details.

Tax Tips on Higher Retirement Plan Contributions

The Solo 401(k) for the Self-employed
Many sole proprietors and single shareholder/employees with their own corporations can boost their retirement savings substantially with a solo 401(k).
Full Article

Employer Options for Health Care Benefits
Tax Advantages of New Reimbursement Plan
Business Tax Tip -- consider a health reimbursement arrangement or HRA to provide health benefits to employees. HRA contributions are tax-free to employees and tax-deductible for the business.

Full Article

Business Tax Tip for Home Office Users
Proper Reporting of Home Sale can Save Tax $$

Only the amount of depreciation claimed for business use of the home is taxable gain in most cases. Reporting the sale correctly can save substantial tax compared to the former rules.
Full Article

Like-Kind Exchange of Home with Home Office
Complicates Reporting of Sale and Increases Required Holding Period

If you acquire a building in a like-kind exchange of two business properties, then later convert the building into your principal residence, you must hold the property for five years in order to claim the tax exclusion for sale of a principal residence.
Full Article

Tax Tips for Use of Your Vehicle for Business
Mileage Rates Increased for 2005
The standard mileage rate for business use of a vehicle in 2005 is 40.5 cents per mile. For moving a primary residence or medical care, the 2005 mileage deduction is 14 cents, for charitable driving, it's 15 cents.

Lower Car Depreciation Limits for 2005
Bonus Depreciation Ended on December 31, 2004
Here are the new, lower, limits on depreciation for business use of an automobile, effective for any car first used in business on January 1, 2005 or later:

First Tax Year	$2,960
Second Tax Year	$4,700
Third Tax Year	$2,850
Each Succeeding Year	$1,675

New Rules on Business Start-Up Expenses
Part Deductible and Part Must be Amortized
If you started a new business in 2005, you may elect to deduct up to $5,000 in start-up costs in the first year. Start-up costs in excess of the $5,000 limit can be amortized over 180 months beginning with the month your new business begins operations. Prior to October 22, 2004, all start-up costs were amortized over 60 months with no first-year deduction.

Small Employer Tax Credit Available
For Establishing a New Retirement Plan
Employers with 100 employees or fewer are eligible to claim a tax credit for some of the costs of setting up a new retirement plan. The credit equals one-half of the start-up costs incurred to create a new employee retirement plan, up to a maximum credit of $500 per year for each of the first three years the new plan is in operation.


	Standard Mileage Rates for 2005 For 2005, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck increases to 40½ cents a mile for all business miles.


	Section 179 Deduction Boost The maximum Section 179 deduction you can elect for property you place in service in 2005 increases to $105,000 for qualified Section 179 property. This limit is reduced by the amount by which the cost of Section 179 property placed in service during the tax year exceeds $420,000.


	S Corporation Shareholder Limits Increased S corporations can now have up to 100 shareholders. Previously the limit was 75. For purposes of counting the number of shareholders to determine if the 100-shareholder limit is exceeded, all family members can elect to be treated as one shareholder.


	Social Security Tax Ceiling Raised The first $90,000 of your net self-employment income is subject to self-employment tax in 2005.


	New Rules for Timber Sales Outright sales of standing timber after December 31, 2004, will qualify for capital gain treatment. The requirement that the owner of timber must retain an economic interest in the timber in order to obtain capital gain treatment no longer applies to outright sales of timber.


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Small Business Income Tax Guide Business Tax Tips to Use on Your Tax Return -- Summer 2005 Archive Articles (NOTE: The tax information in the following articles was current as of the date on the page. Tax law may have changed since these articles were posted.)

Small Business Tax Tips business tax guide small business tax tips small business tax guide

Small Business Tax Tips

Small Business Income Tax Guide
Business Tax Tips to Use on Your Tax Return
-- Summer 2005 Archive Articles
(NOTE: The tax information in the following articles was current as of the date on the page. Tax law may have changed since these articles were posted.)

Small Business Tax Tips
business tax guide
small business tax tips
small business tax guide