NEW YORK (MainStreet) -- Whether it's for personal or business tax returns, tax time can be daunting.
The Internal Revenue Service has carved out a section of its Web site designed specifically to help small businesses file their taxes correctly. The tax code is fluid and there are always exemptions being made -- and taken away -- during any given year.
|Business owners still have a week to take advantage of several deductions or credits to reduce taxes this year.|
For one, the Small Business Jobs Act of 2010 contains several tax provisions that took effect this year, while others will be implemented over the next few years.
Looking for some last-minute business tax benefits this year? Here are four that can lower your taxes if you take advantage of them by Dec. 31 and two other issues business owners should keep in mind for 2012.1. Establish a retirement plan.
If your business is considering starting a retirement plan, do it before year-end and you'll be able to write off the setup expenses. The IRS says you don't have to start contributing, if that's what you intend, until next year. "One of the things we're talking to clients about is the tax benefits that would be out there for a client that was going to set up a retirement or 401(k) plan. There are some relatively beneficial tax benefits in doing that," says Mike Trabold, head of compliance risk management at Paychex (PAYX). "Usually you're able to get a credit for the first $500 of the setup fees." 2. Implement accelerated depreciation benefits.
Two favorable business deductions will be significantly rolled back in 2012 unless Congress moves to extend them: Section 179 expensing and bonus depreciation. "If you're considering buying equipment, you should absolutely do it by the end of the year," Trabold says. "There is a degree of uncertainty those benefits will be available next year." Section 179 expenses: According to tax code, businesses can take a deduction on the first $500,000 on new and used assets put in service before Dec. 31. Things such as office furniture, new phone systems and other equipment qualify. Bonus depreciation: Bonus depreciation is an extra incentive for businesses that have invested in new, tangible property, such as equipment or space. The deductible can be used only in the first year the property has been bought, says Bill Smith, director of the national tax office at CBIZ MHM (CBZ).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV