Tax Saving Tips for You and Your Small Business
November 4, 2008
The last thing you want to think about right now is taxes. But by acting before the end of the year, you or your business could get some significant tax relief.
* Income and expense. The most fundamental steps include deferring income and accelerating deductible expenses. If you can delay taxable income until January 1 and pay for invoices and expenses not usually handled until the following month or 2, you will save on your income tax.
* Contributions. Year-end planning also involves maximizing contributions to qualified retirement plans such as a 401(k). They must be made before the end of each year. (IRAs have a later date.)
* Portfolio. If you have planned to sell your losers, do it before January 1. Losses in excess of gains can be used to offset up to $3,000 in ordinary income, or $1,500 for a married couple filing separately.
One tax break available in 2008 through 2010: Couples with incomes of $65,000 or less ($32,000 for singles) are exempt from capital gains tax. Example: If you are single and after deductions and exemptions have $22,000 in income from wages and interest, you would pay no tax on up to $10,550 in capital gains, which would bring your income to the $32,550 limit.
This break is very helpful for investments that have been held for some years while their value has risen.
* Gifts. You can transfer $12,000 per person as gifts and reduce your income by that amount. A couple can reduce their income by $24,000. (The person who receives it doesn’t have to pay income tax on the money.)
* Learning credits. People with adjusted gross incomes between $7,000 and $57,000 may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all of their students who are enrolled in eligible educational institutions.
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[...] income until January 1 and pay for invoices and expenses not usually handled until the following .. View post Add your [...]
[...] The last thing you want to think about right now is taxes. But by acting before the end of the year, you or your business could get some significant tax . Read more [...]
[...] But by acting before the end of the year, you or your business could get some significant tax relief. * Income and expense. The most fundamental steps include deferring income and accelerating deductible expenses. Read more [...]
Is the following quote from your web site accurate?
“Gifts. You can transfer $12,000 per person as gifts and reduce your income by that amount. A couple can reduce their income by $24,000 per person.”
Thank you Gene. Correction was needed.