With the end of 2011 hours away, I thought I would offer a few last minute tax saving tips for the bloggers and other cash basis businesses. If you need any equipment (computer, laptop, printer, camera, software etc…) now is the time to purchase, but you do not need to pay for the item(s) up front. You can finance these items and utilize a provision in the tax code that allows for 100% accelerated depreciation on these items. Remember, if you have a tax question, email my husband who is an experienced accountant at email@example.com or check out my Ask An Accountant Series for previous Q&A’s.
- Prepay rents, dues, or any other monthly expense. This will give you the deduction in the current year versus next year.
- Make a contribution to your IRA.
- Make a charitable contribution to a qualified charity.
- Donate gently used items to Goodwill and deduct the Thrift Shop value or comparable sale value of the items.
- Pay any outstanding medical bills.
- Pay bonuses to employees if you have them.
I hope this helps anyone that thinks they will owe taxes this year. I highly recommend building a relationship with an accountant to assist with this throughout the year.
Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.
photo credit: austinpost.org
IRS Circular 230 Notice: Any U.S. tax advice in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions
Filed under: Ask an Accountant