While you should talk to your accountant or tax preparer about tax strategies specific to your business, there are some tax strategies that small business owners can use to reduce their business income tax bill.
Here are a few tax strategies for small businesses:
Buy a big, heavy vehicle
Section 179 of the U.S. Tax Code allows an instant depreciation deduction privilege of up to $25,000 of the cost of a new or used heavy SUV that’s placed into service before the end of your business tax year.
After that deduction, follow the “regular” tax depreciation rules to write off what’s left of the business portion of the heavy vehicle’s cost over six years.
To qualify, the “heavy” vehicle must have a manufacturer’s gross vehicle weight rating above 6,000 pounds, and must be used for more than half of the time for business. The weight rating can usually be found on a label on the inside edge of the driver’s side door at the hinge. [Read more…]