Last-Minute Tax Strategies

Entrepreneur’s Journal reports that with the recession, the federal government implemented a variety of tax-saving programs to spur business.

But as should be expected, there are limits. Might some of the tax-breaks go away next year?

Net Operating Losses (NOLs): Typically, you can carry back NOLs two years. But, with new legislation from Congress, the time frame has been extended to five years. However, the fifth year is limited to 50% of the taxable income.

This means you could be eligible for refunds from the IRS. To do this, you’ll need to file amended returns.

Section 179 Deduction: If you buy a long-term asset (which has a useful life beyond one year), you typically have to depreciate the cost over time. But the IRS has a provision, called Section 179, that allows you to take the deduction in one year. In fact, for 2009, the amount is up to $250,000.

Credits: They are extremely valuable, since they reduce your tax liability dollar-for-dollar. However, it can take some research to find tax credits that apply to your business.

For example, have you heard of the “Work Opportunity Tax Credit”? Under this program, you get a credit if you hire returning veterans or “disconnected” young people.

There are also a variety of credits for energy saving programs.

Notice: When considering any tax advice, you certainly should talk to a professional.

Photo by US Treasury.

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