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Tax Tips Small Business

Turning Interest Payments Into Tax Deductions

Make interest payments work for you, not against you

You can deduct business-related interest on your business return if you used the borrowed funds to purchase business supplies, equipment, services, etc. Co-mingling business and personal expenses makes it difficult to determine what amount of the interest is business versus personal. If this happens, the IRS may consider the entire amount as nondeductible personal interest and disallow the deduction. Therefore, keep all business purchases made with loans and credit cards clearly separate from your personal expenses. Use a separate credit card for your business to make it easier.

Small Business Quick Tip

If you are disposing of property used in your business, you may want to consider a like-kind exchange to defer the taxable gain on the sale.

Charitable Remainder Trusts

Reduce your estate by gifting property

There are many ways to contribute to a charitable organization. You can write a check, donate property, or give of your time. If you're planning for retirement, you might want to consider making a gift of a future interest in your property by establishing a charitable remainder unitrust or annuity trust. These trusts allow you to contribute the property and retain an income stream.

You have an income interest in the property while the charity receives the actual property at some future date. At the time you contribute the property to the charitable remainder trust, you'' receive a charitable contribution deduction. This is a win-win situation for all. The charity can continue its work and you receive income and charitable deduction while reducing your taxable estate.

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Wednesday, 03 December 2008

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Tax Tips Personal

Did You Move This Year?

Your moving expenses may be deductible

If you moved this year because of a change in your job location or because you started a new job, you may be able to deduct the reasonable expenses of moving household goods and personal effects to your new home. The expenses of traveling to the new home including lodging expenses, are also deductible. Meals, however, are not.

Personal Quick Tip

If you tax refund was too high or too low, adjust your withholding so it doesn't happen again next year. You can file a revised W-4 with your employer at any time to increase or decrease the number of exemptions you claim. The more exemptions you claim, the less tax your employer withholds from your wages, resulting in a smaller refund. Decreasing the number of exemptions results in more withholding and a larger refund.