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Weekly Tax Tips for Business People #2

Updated: Jun 22, 2023

1) Keep repairs separate!

Ordinary rep: and maintenance on business equipment and buildings are deductible business expenses. Improvements which materially add to the value of the property or significantly prolong its use life must be depreciated over a period of year. To avoid losing tax deductions for repairs and maintenance, make major improvements completely apart from repairs and maintenance.

2) Don't miss business tax credits that's still available!

Congress often uses tax credits encourage certain activities. Regularly check credits that could apply to your business.

3) If you're the only employee in your business, look into an individual 401(k) plan.

These plans offer higher contribution limits than other retirement plans, yet they are less complicated to manage than traditional 401(k) plans.

4) Don't subject yourself to tax penalties by misclassifying an employee as an independent contractor!

The IRS is aware that employers prefer to treat workers as independent contractors to avoid paying fringe benefits and payroll taxes. If you're not absolutely sure how to treat a given worker, contact us.

5) Avoid the alternative minimum tax!

If it cannot be avoided, you may be able to use it to your advantage in a given year. But you must know where you stand before year-end and give yourself time to execute tax-saving strategies.



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