The Year-End Shuffle
NFIB:
With fewer than two months before the end of the year, there’s still plenty of time to minimize your exposure to Uncle Sam next year. If you haven’t already, consider the following ideas now to ease your tax burden in April.Expense It: Thanks to the work of NFIB, small-business owners are enjoying increased expensing limits as they prepare their 2005 tax returns. Last fall, Congress approved an extension of the $100,000 Section 179 expensing limit, effective through 2007. So go ahead and purchase the office supplies you plan on using—and planned on purchasing—next year. Now is also a great time to upgrade your equipment. If you start using the new equipment—computer, software, furnishings and machinery—you can expense the cost up to $105,000 in the first year.
Send a Gift: Gifts to legitimate business associates, including clients, co-workers and customers, are deductible up to $25 per gift. What’s more, you can also deduct the price of incidental costs that do not add value to the gift, such as shipping and handling costs. But save the receipts for everything: Even though they’re small purchases, the IRS will need to see them in an audit in order for you to receive the deduction.
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