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10. RETIREMENT PLANS
Contributions to your retirement plan can save on taxes, and you might be able to delay contributions until October. You can get a tax benefit and save for your future.
9. SECTION 179
If you make a profit, it could be an immediate write-off of business assets under Section 179 of the tax code. Or, you can write it off over multiple years and reap more tax savings if you’ll be at a higher tax rate in the future.
8. BONUS DEPRECIATION
This is an additional method to writing off certain business assets. It’s not limited to the business realizing a profit.
7. HEALTH INSURANCE PAYMENTS …
Most employers’ payments of health insurance premiums are fully deductible. When payments are for owners, they may be treated differently but should be fully deductible.
6. … AND HEALTH CARE CREDITS
With recent health reform legislation, small employers (including nonprofits) that pay part of employees’ premiums may be eligible for the credit.
5. EMPLOYEE VS. SUBCONTRACTOR
The IRS and Massachusetts Department of Revenue have strict views on classifying employees and contract laborers. Be certain you consider this.
4. BUSINESS OR HOBBY?
If your business operates at a loss, be certain it meets the definition of a business and not a hobby.
3. GIVING TO CHARITY
Charitable donations for businesses have rules and limits. Be sure certain payments are classified properly. If they qualify as “marketing,” they won’t have the rules and limits.
2. GOOD RECORDS
Estimates are not deductions, but documented business expenses are.
1. PAYING TAXES ON TIME
Paying your taxes late can be very costly since there are fees for installment arrangements, as well as penalties for late payments, late filing and failing to pay enough during the year.
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Worcester Business Journal provides the top coverage of news, trends, data, politics and personalities of the Central Mass business community. Get the news and information you need from the award-winning writers at WBJ. Don’t miss out - subscribe today.
Worcester Business Journal presents a special commemorative edition celebrating the 300th anniversary of the city of Worcester. This landmark publication covers the city and region’s rich history of growth and innovation.
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