In most cases, your expenses will not reduce your tax liability beyond 0. In other words, if you expect to have a net profit in 2009, you can reduce your taxes by making certain payments before the end of the year. If you expect to have a loss, you may want to defer these expenses until after the year if you assume you will have a profit next year.
Among the things you can do to minimize your taxes for your home business in 2009 are:
- Pay any outstanding vendor bills or expenses before the end of the year.
- Make any purchases for equipment that are allowable under Section 179 of the tax code. Section 179 allows you to write off the entire cost of qualified equipment in the year it is purchased, instead of amortizing (spreading) its cost over a period of years and claiming depreciation. Section 179 property is tangible property with a useful life of more than one year that you acquire "in the active conduct of your trade or business". It includes computer and similar equipment used for your business, and you may be able to find great sales at this time of year.
- Need to replenish some office supplies or need new software for your business? Now's also a great time to find deals on these items you can write off against this year's income if you do so by the end of the year.
- Make any charitable donations you were planning before the end of the year to claim them against you 2009 taxes.
You can contribute to your IRA or other self-directed, qualifying retirement plan up until April 15th of next year. And, don't forget, you'll have another estimated tax payment that is due January 15th, 2010 unless you expect to file your return and pay all taxes due by February 1st. Otherwise you could be subject to interest and penalties for any late payments.
Related topics:
Comments
Comments are closed for this post.