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End of Year Tax Savings
Here is a friendly reminder from
Committee of 100 member
Martin Starnes & Associates
of several tax provisions your
company could take advantage of
before the end of 2010:
1.
Buy new equipment:
For tax years beginning in 2010
and 2011, the maximum Section
179 deduction is doubled from
$250,000 to $500,000, while the
phase-out threshold jumps from
$800,000 to $2 million.
Additionally, the law revives 50
percent "bonus depreciation" for
qualified property placed in
service in 2010.
2.
Hire more workers:
The
Hiring Incentives to Restore
Employment (HIRE) Act --
provides a 6.2 percent payroll
tax exemption for qualified
workers hired after February 3,
2010 and before January 1,
2011. Your business may
claim a tax credit of up to
$1,000 if it retains the worker
for 52 consecutive weeks. To
qualify for the HIRE Act tax
breaks, workers can't have been
employed for more than 40 hours
during the previous 60 days.
3.
Fix up the business premises:
Generally, you may currently
deduct the cost of minor repairs
to your business building, like
replacing broken window panes or
fixing leaks. Handle repairs
before January 1, 2011 to
maximize your deduction for
2010. You should note, if
repairs and improvements are
lumped together, the entire cost
may have to be capitalized
4.
Secure bad debt write-offs:
Step up collection efforts at
year-end. The business can
generally deduct debts in the
year that they become worthless.
To support your claims of
worthlessness, keep records of
related activities -- such as
letters, e-mails and telephone
calls.
5.
Stock up:
Order supplies that you would
normally buy in January and
beyond. Don't forget ink
cartridges, business cards,
stationery, and supplies such as
paper towels and coffee. Even if
you use a credit card and don't
actually pay for the items until
2011 or later, the cost will be
deductible this year.
While there is time, consult
with your tax adviser to help
coordinate these tax breaks. |
