Bruce Freeman writes a column called the Small Business Professor for Scripps Howard News service. This week, he talked with Joseph Rosenberg, a certified public accountant, about tax season.
Rosenberg: If you are a profitable business, consider putting away money into a pension or profit sharing plan.
Businesses can also take a tax deduction for automobile usage, either by deducting the actual cost for auto usage or taking a standard deduction per mile driven for business.
If your office is in your home, consider taking a tax deduction for the business use of your home. This is an area of scrutiny, so make sure you follow the detailed rules that apply in this area.
You can deduct the salaries, payroll taxes and certain benefits paid to your employees. They must be legally able to work in the U.S. in order for you to hire them in the first place.
Are they independent contractors who have their own businesses? You can take a tax deduction for engaging them, too, but watch for the state and federal rules that might classify them as employees requiring you to pay employment taxes on them.
If you purchase equipment to use in your business, you can either write that cost over a number of years, or in some cases, in one year.
Business owners may be able to deduct their health insurance premiums as a business expense if they are not eligible to participate in an employer sponsored subsidized insurance plan.
For 2010 the health insurance premiums can also be used to reduce the self-employment tax due on the earnings of the business.
Business owners can also deduct business insurance costs, legal and other professional fees, office expenses such as printing and postage costs, repairs and maintenance, professional dues, advertising and promotion costs, and certain telephone expense.
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