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This page last updated on
January 7, 2004 |
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Small Business Income Tax Guide
Business Tax Tips to Use on Your Tax Return
-- Winter 2004 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.)
A Small Business Tax Tip if You Work From Home
Your Expenses May Be Deductible
If you use a portion of your home for business on a
regular and exclusive basis, you can deduct a portion of your home
operating expenses against your business income.
See the Full Article for
details.
Section 179 Expensing
Tax Law Changes Increase Your Options
The 2003 tax law allows business owners to write off up to $100,000 of
new business equipment in the year of purchase, subject to some specific
requirements and limitations.
Full Article
New Rules on Bonus Depreciation
The Purchase of New Business Equipment Can Save Tax Dollars
The 2003 tax bill adds a 50% bonus depreciation option for business
use assets put into service after May 5, 2003. The previous 30%
bonus depreciation option also remains available.
Full Article
If You Use an Automobile in
Your Business
Should You Buy or Lease?
Leasing may cost less cash per month
and simplify tax reporting of a vehicle trade-in, but purchasing a vehicle
can result in larger first-year write-off options.
Full Article
Employer Identification
Numbers (EIN)
When Does Your Business Need One?
If you are a sole proprietor without
employees, you probably do not need and EIN. If you change the legal
form of your business (from sole proprietor to LLC for example), you will
need a new one. Full Article
Providing
Meals for Your Employees
When Does the 50% Deduction Limit Apply?
When your business pays meal expenses for
employees who travel or meal expenses for entertaining clients, only 50%
of those costs are tax deductible. But there are some situations in
which the full cost of food provided for employees can be written off.
Full Article
Making Improvements to Your Rental Property
What Qualifies as a Deduction and What Must be Depreciated?
Repairs generally restore a property to its
original condition, while improvements are considered to extend the life
of the property or expand its size or capabilities. Repairs are
deductible, while improvements must be depreciated over several years.
Full Article
Did You Start a Retirement Plan for Your Employees?
You May be Eligible for a Tax Break
Hire
your children to work in your small business and shift some income into a
lower tax bracket. Another small business tax tip -- Hire your spouse and reduce your self-employment
tax by offering employee benefits.
Full Article
Deadlines for Small Business Retirement Plans
A SEP plan can be set up and funded by the
due date, plus extensions, for your tax return. For example, the
contributions you make to the plan can be deducted on your 2003 return
even if they are made in 2004 (as long as the plan is set up and funded by
the extended due date of the business return).
However
Keogh plans must be set up before the end of your tax year. You are
permitted to fund the plan anytime up until the due date, plus extensions,
for filing your tax return.
SIMPLE
plans must be established by October 31st of the first year of plan
operation. Contributions can be made up until the business tax return due
date, plus extensions.
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Standard Mileage Rates for 2003/2004
The standard mileage rate for
business use automobiles is 36 cents in 2003. The rate used for
computing depreciation is 16 cents per mile. The standard mileage
rate is allowed in lieu of deducting your actual expenses, and can
be used whether you own or lease your automobile. For 2004,
the rate jumps to 37.5 cents |
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Self-Employed Health Insurance
Deduction
If you are self-employed, you
are allowed a deduction as an adjustment to income for insurance
costs incurred for medical care as long as you are not eligible to
participate in another employer-sponsored plan. For 2003 & 2004,
100% of the cost is deductible. |
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