It’s time for midyear business planning
It’s time to do a midyear review of your business tax planning. Here are six ideas to consider:
- Establishing a retirement plan if you don’t already have one. Examining the choices now gives you time to select the best plan for your business and to get the paperwork completed. Then you’ll be set to make contributions as your cash flow allows – and to take the deduction on your 2008 tax return. Another plus: You may be able to claim a credit on your 2008 tax return for the costs of establishing the plan.
- Tracking your business driving. For 2008, the rate for business-related mileage is 50.5 cents per mile, and you can deduct actual costs for parking fees and tolls in addition to mileage. Keep detailed records to substantiate your deduction.
- Deducting equipment purchases. You can expense up to $250,000 of business equipment purchased this year. If you buy new equipment (not used), you may also qualify for 50% bonus depreciation in 2008.
- Checking your benefits. If you offer health benefits to your employees, look into tax-advantaged plans such as health savings accounts, flexible spending accounts, or health reimbursement arrangements. These plans can reduce your taxes and help control your benefit costs.
- Starting a business. Planning to acquire or start a business this year? Keep good records of your costs to get the business off the ground, including advertising costs, legal fees, and accounting expenses. Up to $5,000 of these expenses could be deductible on your 2008 tax return.
To discuss the tax-saving ideas best suited for your business, give us a call.
Written by Ben Lawler, CPA
CEO & President of ProActive Advisors, Inc.