I got an amazing amount done on my taxes last night, but I'm stuck on some remaining mysteries that perhaps some of you might be able to shed light on
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Use 200% to get the biggest deduction soonest, that is, to pay the lowest tax now.
You might use 150% if you were subject to AMT (you're not).
Use straight-line if you want to evenly spread out your deductions over the years (as opposed to front-loading your deductions). You might want to do this if you think your tax bracket will be higher in future years (because tax rates go up, or because you earn enough more to be in a higher bracket). In this case, a deduction later could be worth more than a deduction now.
"It's hard predicting, especially about the future" so I almost always do the 200% and eat dessert first.
Your purchase may qualify for the Section 179 deduction, which allows you to take all the cost off your taxes immediately. See:
If you're unfamiliar with varying forms of depreciation, you probably want to have a small business expert review your tax return for the first year or two. There are *many* ways to save money, and many gotchas.
If you're unfamiliar with varying forms of depreciation, you probably want to have a small business expert review your tax return for the first year or two. There are *many* ways to save money, and many gotchas.
I did pump my accountant friend for clues, which was useful to some extent. Did you have someone you recommend?
Section 179 is extreme *front*-loading (100%) for depreciation, not back-loading, unless it has some features I'm unaware of.
My old tax preparer was wonderful, but he died, and I now do my returns myself. I would think that knowledge about small-business taxes would be fairly widespread.
What I found hard to find was a tax preparer who shared my aggressive approach. There are many gray areas in the tax code where *no one* understands what was really meant. I want a preparer who will take every deduction we can make an argument for, and who's good at making arguments.
Section 179 is extreme *front*-loading (100%) for depreciation, not back-loading, unless it has some features I'm unaware of.
"If a business is unprofitable in 2013, and has no taxable income to use the deduction, that business can elect to use 50% Bonus Depreciation and carry-forward to a year when the business is profitable."
I have no idea how to do this, I have no idea if this applies to 2012, and have yet to find instructions, but it would seem to be a lead.
What I found hard to find was a tax preparer who shared my aggressive approach. There are many gray areas in the tax code where *no one* understands what was really meant. I want a preparer who will take every deduction we can make an argument for, and who's good at making arguments.
...I may know the guy for you. Though he said he was booked up this year.
I talked to a guy at an H&R Block today, and I asked him about the tax treatment of domain names; he went to go look some stuff up, and then came back and told me they're a depreciable capital asset, and handwaved just what schedule they'd depreciate on. I'm sure that's what a lot of business owners want to hear, but it established to my satisfaction that he knows less about the IRS's opinion on the tax treatment of domain names than I do. If I'm going to pay someone money, I'd like them to know more about this than I do.
You might use 150% if you were subject to AMT (you're not).
Use straight-line if you want to evenly spread out your deductions over the years (as opposed to front-loading your deductions). You might want to do this if you think your tax bracket will be higher in future years (because tax rates go up, or because you earn enough more to be in a higher bracket). In this case, a deduction later could be worth more than a deduction now.
"It's hard predicting, especially about the future" so I almost always do the 200% and eat dessert first.
Your purchase may qualify for the Section 179 deduction, which allows you to take all the cost off your taxes immediately. See:
http://www.section179.org/section_179_deduction.html
If you're unfamiliar with varying forms of depreciation, you probably want to have a small business expert review your tax return for the first year or two. There are *many* ways to save money, and many gotchas.
Reply
You might want to do this if you think your tax bracket will be higher in future years
I can predict with confidence that my tax bracket will be going up. See, there's not a lot of down for it to go.
Is there a back-loading form of depreciation?
http://www.section179.org/section_179_deduction.html
Oh, yes there is! Awesome. Thanks.
If you're unfamiliar with varying forms of depreciation, you probably want to have a small business expert review your tax return for the first year or two. There are *many* ways to save money, and many gotchas.
I did pump my accountant friend for clues, which was useful to some extent. Did you have someone you recommend?
Reply
My old tax preparer was wonderful, but he died, and I now do my returns myself. I would think that knowledge about small-business taxes would be fairly widespread.
What I found hard to find was a tax preparer who shared my aggressive approach. There are many gray areas in the tax code where *no one* understands what was really meant. I want a preparer who will take every deduction we can make an argument for, and who's good at making arguments.
Reply
"If a business is unprofitable in 2013, and has no taxable income to use the deduction, that business can elect to use 50% Bonus Depreciation and carry-forward to a year when the business is profitable."
I have no idea how to do this, I have no idea if this applies to 2012, and have yet to find instructions, but it would seem to be a lead.
What I found hard to find was a tax preparer who shared my aggressive approach. There are many gray areas in the tax code where *no one* understands what was really meant. I want a preparer who will take every deduction we can make an argument for, and who's good at making arguments.
...I may know the guy for you. Though he said he was booked up this year.
I talked to a guy at an H&R Block today, and I asked him about the tax treatment of domain names; he went to go look some stuff up, and then came back and told me they're a depreciable capital asset, and handwaved just what schedule they'd depreciate on. I'm sure that's what a lot of business owners want to hear, but it established to my satisfaction that he knows less about the IRS's opinion on the tax treatment of domain names than I do. If I'm going to pay someone money, I'd like them to know more about this than I do.
Reply
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