Small Businesses, Bite a Chunk Out of Your Taxes!
Small Businesses, Bite a Chunk Out of Your Taxes!
Here are some deductions which may help you take a bite out of your taxes this year.
Targeted-group workers. The current Work Opportunity Tax Credit (WOTC) could provide small businesses up to 40% of up to $6000 of a qualified worker’s first year wages. Qualification for new hires must be examined since the eligibility for WOTC has been expanded to include more worker groups such as the hiring of disabled veterans. The WOTC has been extended through August 31, 2011.Aim at business debtors. Businesses are urged to increase their efforts to collect past-due amounts from customers to derive some tax benefits. A debt that has become totally worthless in 2007 could be claimed as a deduction this year. It should be noted that a business cannot deduct any part of a bad debt after the year it has become totally worthless. Detailed documentation of collection efforts such as letters, phone calls, emails, and authorizations to debt collection agencies should be maintained to support claims of debt worthlessness.Manufactured goods. Sec. 199 of the tax code allows a domestic producer to claim “manufacturing deductions.” To qualify for the manufacturing deduction, the law qualifies that activities must be performed in “significant part” in the United States. To satisfy this rule, a business’ labor and overhead costs for manufacturing, production growth and extraction must be more than 20% of the total cost for the property. The maximum deduction for 2007 is 6% of the lesser of taxable income from qualified production activities or taxable income.Business trips. Don’t forget to write off business-related travel expenses in 2007 such as air fares, lodging, and 50% of the cost of meals. Individuals travelling by car can write off the actual auto expenses, including depreciation (IRS “luxury car” rules apply) or use the standard 48.5 cents per business mile.Repairs. Minor repairs made before January 1, 2008 could be tax deductible. Repairs involve keeping a property in a normal operating condition without adding appreciably to the property’s value or prolonging its useful life. Individuals must be aware to clearly define repairs from improvements (renovations), which tend to increase the property’s value and prolong its useful life. Caution should be taken about making repairs and renovation at the same time; instead, those should be spaced at least a month apart.
SUV. For heavy vehicles weighing more than 6,000 pounds, a business owner may be able to write off up to $25,000 of the cost especially if that individual needs extra room for hauling supplies or equipment. It is exempted from the IRS’ “luxury car” rule which limits the first year deduction only to $3,060 for passenger cars placed in service in 2007.
—————————————————————————————————————————————————————————————————————
We hope you found this article about “Small Businesses, Bite a Chunk Out of Your Taxes!” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Tech ETFs Were a Hot Commodity in January Trading
Tech ETFs Were a Hot Commodity in January Trading No matter what happens in the stock market, it seems that technology always plays a huge role in investing. Tech stocks are often some of the most popular stocks available and many fortunes have been earned and/or lost through investments in technology. In fact, recently, it…
Are Republicans Reconsidering Tax Cuts for the Wealthy?
Are Republicans Reconsidering Tax Cuts for the Wealthy? While Republicans continue to promise tax cuts for everyone, most media pundits and Democrats claim that those plans will only help the wealthy. That’s an argument that will never end, but could it be possible that Republicans are changing their tune? There is growing speculation that Republicans…
Gouging the Rich With Higher Taxes is Not Working in Connecticut
Gouging the Rich With Higher Taxes is Not Working in Connecticut It’s no secret that our nation’s tax code is designed to get more from the rich than from the other working classes. Federal tax rates are higher for the wealthy, as are many states’ income tax laws. In fact, many states take direct aim…
Could the Wealthy Still Pay Obamacare Tax After Trump Plan Replacement?
Could the Wealthy Still Pay Obamacare Tax After Trump Plan Replacement? It’s now June and the fight over the nation’s healthcare bill is still ongoing. It’s not that lawmakers aren’t trying to get something done that would ultimately replace Obamacare, but as with most things in Washington, it’s a slow-moving process. The House’s first attempt…