With the end of 2006 approaching, there is still time to save money on your tax bill. Here are 10 useful tips that you can use:
- Business owners can purchase an SUV on credit and get up to a $25,000 instant deduction as well as the benefit of an additional depreciation amount to the extent that the SUV costs more than $25,000.
- Business owners can purchase a 3/4 ton truck (or larger) and write the whole amount off up to $108,000.
- Setup a SEP retirement account in 2006 and you will not have to fund the retirement account until October 15, 2007 if you file extensions.
- Owners of businesses who use the Cash Accounting Method can ask their clients or customers to refrain from paying invoices until 2007. This will defer the taxes into the next year.
- Business owners can pay bills in December 2006 that are due in January 2007 in order to obtain an early write off.
- Property owners can rent a space in your home to their business as an office and write off part of the utilities, insurance, taxes, interest, repairs and depreciate part of the home. The business should be a corporation or an LLC. Otherwise you may take the office in the home deduction for your schedule “C”.
- Incorporate if your own a small business that is netting more than $35,000 annually. Business owners can realize tax savings as well as protect personal assets. The rush is on to incorporate on Jan 02, of 2007.
- Teachers can still write off up to $250. However, there is no line on the 1040 to list it anymore as the write off was approved after the forms were printed.
- Purchase a new car and write off the sales tax in 2006.
- The biggest tax tip is to avoid preparing your own taxes. Software cannot replace a professional in using every benefit available to you. You will save time, taxes and reduce your chances of being audited.
And remember, there are limits and special conditions to the above, so consult your tax expert to make sure you can qualify for any of the above benefits.
About the Author: John Leslie, a certified QuickBooks Pro Advisor, has 20 years of experience in the tax field. Mr. Leslie is a member of the Lakeside Chamber of Commerce has been involved in the San Diego business community since 1986 and has lived in the area for over 40 years. His strong ties to the community have shaped the client-business philosophy for which IRSTAXHELP.COM is known.