With only a few more weeks left in 2012, there is limited time to implement ideas that will result in tax savings for the year. But until the New Year's bell tolls, here are a few last minute things you can do to make your 2012 tax bill a little easier to cope with...1.) Section 179 Expensing: Furniture, equipment, software, vehicles and capital assets are normally subject to a write off over their useful life.
2.) Startup Expenses: Did you know that you may write off the expenses you incur in the investigatory or startup phase of your business? This deduction works once the business is operational, so if you are still in startup mode on Dec. 31, you must defer the deduction to 2013. The IRS defines an operating business as one that has opened its doors or is accepting transactions.
3.) Set up or Fund your Retirement Plan: Contributions made to retirement plans reduce your taxable income.
4.) Holiday Parties provided for your employees are 100% deductible. Parties for clients and associates are 50% deductible. But there are rules. You must have a business purpose and that consists of more than just promoting goodwill or networking and the expense cannot be lavish or extravagant.
5.) Expense Account Reimbursements: Gather together all those receipts for business expenditures you paid out of personal funds and have your business reimburse you before year end.
6.) Charitable Contributions : Check with your tax pro to find out if you should be giving personally or if it’s better for gifts to be made from business funds. And don’t forget to get those acknowledgment letters. The IRS has been auditing and disallowing contributions without that backup document. A cancelled check is not enough substantiation.
What other last minute tax saving tips do you have? Share them!
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