7 Tax Savings and Financial Planning Ideas for your Business

#1)   Any Accounts Receivable that need to be written off?  (does not apply to Cash Basis Taxpayers)

#2) 100% Bonus Depreciation

Bonus depreciation has been boosted to 100% for qualified investments made in 2011. This reverts back to 50% in 2012.

Unlike Section 179 expensing, it is not limited to use by smaller businesses or capped at a certain level.

Bonus depreciation is not limited by the size of a taxpayer's investments in

qualified property and it can generate net operating losses. Keep in mind that bonus depreciation applies only to new property and is not exempt from certain

uniform capitalization rules as is Section 179 expensing.

#3)   Section 179 up to $500K (for Federal Returns) in 2011.

Planning on purchasing any assets for the business in the near future?

Some assets purchased in 2011 may qualify for a special depreciation allowance.

Qualifying property includes tangible personal property and up to $250,000 of real property.

The deduction for up to $250,000 of real property includes qualified leasehold improvement property (improvements to an interior part of a nonresidential

building that is conditional to a lease and used exclusively by the lessee),

qualified restaurant property, and qualified retail improvement property.

This provision is only for 2011.

Please note that in 2012, the dollar limit for Section 179 expensing drops to $125,000.

#4)   Timing Strategies.

Any expense items that can be accelerated into this year?

Any income items that can be deferred to next year?

#5)   Considering hiring your children?

In 2011, first $5,800 earned by each child is tax free and not subject to kiddie tax.

A child's wages, which is earned income, is always taxed at their tax rate.

This may help a child toward earning half of their support and thus might help their

unearned income (interest, dividends, investment, etc.) to avoid the kiddie tax.

If applicable, a child must have earned income to contribute to a traditional or Roth IRA.

#6)   Basis in Partnerships, LLCs, or S Corps?

If a loss is expected in a Partnership, LLC, or SCorps,

do you have enough basis to deduct the loss?

Consider increasing your basis.

#7)   Retirement Accounts.

The matching of the employees' contribution is generally a deductible expense.

Several types of retirement plans are available to businessess and business owners.