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Small-business owners who have put off doing their 2010 tax return so far this year have less than one week until Tax Day. The National Association for the Self-Employed (NASE) has one piece of advice – don’t panic. Keith Hall, NASE National Tax Advisor, offers these last minute tax tips for small-business owners who are starting to sweat: Check for hidden deductions: If you work out of your home, your office may qualify for a deduction. Do you drive to the post office or a client site? Those miles may add up to a sizable deduction too. Retirement Savings...
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Q: I'll wrap up my first year of business at the end of this year. I need to find a tax professional who can help me with my business tax returns. What should I look for in a tax advisor?
A: Congratulations on a successful first year as a micro-business owner!
The most important aspect when choosing a tax professional is finding one you feel comfortable talking to and one who can explain tax matters so that you understand. You also need to find a professional who will get to know your business and your industry.
Check with colleagues, your ...
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Q. I thought that the Section 179 limit was just $134,000 for this year. But I’ve heard it was increased. What’s the limit for 2010? A. The cap on the Section 179 deduction was scheduled to be reduced from $250,000 to $134,000 for 2010. But, the Hiring Incentives to Restore Employment (HIRE) Act keeps the maximum Section 179 deduction at $250,000, which is the same as 2009. This deduction is for qualifying depreciable business assets placed in service in tax years starting in 2010. The result is that micro-businesses can deduct significantly larger amounts of the cost of qualifying property ...
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Q. Can you explain the tax benefits of the HIRE Act? A. The Hiring Incentives to Restore Employment (HIRE) Act that passed this year created two new tax benefits to encourage employers to hire and retain new workers. Employers who hire unemployed workers after Feb. 3, 2010, and before Jan. 1, 2011, may qualify for a 6.2-percent payroll tax incentive. The incentive effectively exempts employers from their share of the Social Security tax on wages paid to these workers after March 18, 2010. In addition, for each unemployed worker retained for at least a year, business owners ...
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Q. I have an S corporation. I didn’t file my federal corporate taxes until June. Will I have to pay a penalty for late filing? A. If you didn’t request and receive an automatic six-month extension for filing your corporate taxes, then yes, you’ll be subject to a late filing penalty. The penalty is imposed on any S corporation or partnership that files a return past the due date, including extensions, or files a return with incomplete information. For the tax year 2009, the penalty is $89 and is owed by every partner or shareholder for each ...
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Q: I own a landscape business and want to get certified as a green grower.
The certification requires me to take classes, which cost money. And I must pay a certification fee. Can I deduct those costs as business expenses?
A: Yes, all of those costs are legitimate tax deductions for your business.
In fact, if you take additional classes as part of your continuing education in the landscape industry, you can also deduct those costs. And if you’re required to pay an annual fee to maintain your green certification, that cost is also deductible.
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Q: I just started a welding business and am terrified of getting audited by the IRS. Are there any things I can do to make sure I prepare all of my taxes correctly? A: As a new business owner, you have the opportunity to get started right with respect to tax preparation. Tax preparation isn’t just about filling out tax forms. It’s also about maintaining adequate records and staying organized so you can avoid potential problems. My advice is to follow the three Cs of tax preparation: 1. Careful record keeping – Keep accurate records and notes so you can ...
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Q: What are the contribution limits in 2010 for traditional IRAs and Roth IRAs? A: The contribution limits for individual retirement accounts depend on your age.If you’ll be age 50 or older by the end of the year, the limit is $6,000. If you’ll be younger than age 50, the limit is $5,000.The reason for the difference is catch-up contributions, which are designed to help people save more as they move closer to retirement age. Be aware that the maximum contribution is a combined limit. In other words, you can’t contribute that amount to both a Roth IRA and a ...
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Q: I would like to purchase a bicycle for my business that I would use instead of my car to get to my client sites at home and when I travel. I would also use the bike to attend promotional bike centric networking events put on by groups promoting small businesses in the area. Is this a legal expense, since I will be using the bicycle as a means of promoting my company? A: If the bike is indeed purchased primary for business, then it indeed would be a deductible business expense. The personal usage of the bike, as it ...
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Q: I attended the TaxTalk seminar in Casper, WY, in March. You mentioned some tax perks to hiring your spouse. Can you explain that to me? A: The key benefit to hiring your spouse is related to the benefits of a Health Reimbursement Arrangement used to maximize the pre-tax payment of medical expenses. For about the last 25 years, the IRS has allowed small businesses to adopt Heath Reimbursement Accounts for their employees as authorized under Internal Revenue Code Section 105. The NASE HRA 105 plan is such a plan, thus the name 105. These Plans allow for your ...