By month:July 2015
Have you ever faced this “problem”? A sudden boom in business requires you and your employees to work late in order to get everything finished. When this happens, how can you thank your employees for their overtime with a tax-free benefit that’s fully deductible to your business? You can provide a supper money fringe benefit if you follow four rules.
Most business meals suffer a 50 percent cut in the amount you can deduct. But here’s one of those business meal strategies that produces a 100 percent deduction. So if you spend $5,000 for meals with this strategy, you don’t deduct $2,500 because of the 50 percent. Instead, you deduct the full $5,000.
Business owners who operate their businesses as corporations and also deduct an office in the home commonly use one of three tax-deduction methods in an effort to achieve tax benefits. One method provides no tax benefit; it’s just smoke and mirrors. The second method might create a small deduction or none at all. The third method is the correct choice, as it ensures the full tax deduction and even reduces your chances of an IRS audit.
Tax law gives you several nice tax-saving strategies for your business assets but not many for your personal assets. So what happens when you convert a personal asset to a business asset? Does the personal taint last forever? No! This conversion opens the door to a world of new deductions.
You likely want to hire independent contractors whenever possible. But if you are bending and breaking the rules, you face big back taxes, horrific penalties, and interest. So, a question for you: Have you been misclassifying your workers? If so, the IRS has a good deal that lets you off the hook with just a tiny payment. We’re talking a fraction of what you would otherwise owe if you lost your contractor classification in an IRS employment tax audit.
The government wants to give you the gift of education. Your lawmakers in Washington created a tax break for courses that improve or maintain your business skills. You can deduct in full the cost of education ranging from a standalone seminar all the way up to an advanced degree—including the cost of an MBA program. But in order to get this deduction, you have to follow a couple simple rules.
You can protect yourself against the financial consequences of chronic illness or disability by purchasing long-term care insurance. The premiums for this insurance are not cheap, but tax law lets you write off the cost, thus subsidizing your purchase. But beware—there are three ways to take this deduction. Choosing the wrong method could cost you thousands of dollars in tax benefits.
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