Wednesday | May 23, 2012
Are You Paying Too Much Tax? How to Save on Taxes with Business Tax Deductions.
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By
Cory Johnson
19 November 2008
Tax deductions may allow a small business owner to offset the expense of starting and running a company. The Internal Revenue Code (IRC) provides for certain business tax deductions on equipment, vehicles, travel, and more. Some home-based businesses can also deduct a portion of rent, utilities, and insurance.
Log your business expenses regularly and save your receipts to help maintain an accurate accounting of your expenditures. You may need these records to help calculate deductions or to provide to the Internal Revenue Service (IRS) during an audit.
Many businesses take advantage of the following deductions:
• Startup costs. Companies may incur startup costs for research, advertising, licensing, and other items prior to opening for business. Rather than deducting these costs in the year in which they incur them, businesses can deduct startup expenses in equal amounts over their first five years in business.
• Operating expenses. Day-to-day operating expenses include employee salaries, rent, travel, and more. Businesses can deduct operating expenses in the year in which they incur them. You should, however, familiarize yourself with IRS limits on the amounts you can deduct.
• Inventory costs. Inventory consists of items that you make or buy, then resell. These costs differ from startup expenses. Businesses can deduct inventory costs as they sell the inventory.
• Capital expenses. Land, equipment, machinery, or buildings may qualify as capital expenses. These expenses include long-term investments, as opposed to simple operating costs. The appropriate timing for deductions on capital expenses depends upon several factors, including the size of the business.
• Auto Expenses. You may be able to deduct costs associated with a vehicle you use for business purposes. Small business owners may opt for a deduction based on mileage, or you can measure how often you used your vehicle for business use vs. total use.
• Professional expenses. Business owners can usually deduct expenses associated with retaining an accountant or attorney for the business.
To better understand your individual tax situation and to review all your eligible business deductions, The Company Corporation encourages you to consult your accountant or tax specialist.
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Will Simmons said:
It is really great to know that world’s best university Stanford has involved facebook in its courses. It will really help to enhance the knowledge of social media and other technological channels in students. The trained students will boost the technology of their country. in the world. Custom Coursework |
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I’m interested to see if other colleges will start to implement the same type of idea. If it works for Stanford, who says it can’t work for other Universities that have the passion and time to do a similar feat?
I’m curious to know how they came up with the ideas for the applications. Did they first identify a need in the marketplace or just take a wild guess, some getting lucky while others didn’t.
It’s definitely good to see college kids making a difference because of something that was learned while attending a class. I’ve found that many of the classes I took in college were simply based on theory. This was discouraging to me as an Entrepreneur because many of the teachers spoke about what might happen in a professional setting, without actually having the experience of working in that setting.
Great post!
Chris from Brain Smart Success