By month:April 2007
Many people, through keen knowledge of the tax law, have been able to use the law to their advantage and buy personal aircraft. Unfortunately, lawmakers changed the rules for deducting personal aircraft. We summarized the new rules for you.
You are entitled to tax refunds for the excise tax you paid on your business long-distance phone services from March 2003 through July 2006. To calculate your tax credit for these 41 months, you may use the actual excise tax from the phone bills, or use the newly released formula.
To calculate the deductions for a business vehicle when you sell it, you must divide the car into business and personal parts, find your adjusted basis for business purposes, and find your loss deduction.
Even if you do not owe any money, you move right to the front of the line for an IRS audit if you do not file your taxes on time. Always file a tax return, even if you cannot pay the tax.
A personal-service corporation, like that of an accountant, is taxed at the maximum corporate tax of 35%. Instead, consider the S corporation strategy for saving on Social Security.
If you personally own the vehicle that your corporation uses, the IRS authorizes the reimbursement of the vehicle expenses. To make this work, you must submit an expense report and mileage log to your corporation.
The tax law allows you to deduct the cost of laser eye surgery, as long as it produces a business benefit. There are specific details that apply, though, so read carefully.
You get no business benefit from the section 105 plan at the S corporation level. However, you do get a big personal benefit when you steer the medical insurance through the S corporation to give yourself the medical insurance as a guaranteed payment.