Tax Tip of the Week
November 12, 2007

There are no time machines, so you can't come back to today from the future. That's one reason planning ahead is important - and why now is the time to think about what you can do before the end of the year to trim your business tax bill.

Here are three suggestions:

1. Take advantage of energy incentives. Making energy-efficient improvements to commercial business property by December 31 can garner a federal tax deduction. The maximum deduction is $1.80 per square foot.

A partial deduction is available for improvements such as interior lighting and hot water systems that meet certain energy-savings targets.

2. Benefit from depreciation write-offs. Instead of waiting until January to upgrade computers or software, consider buying them now.

For 2007, you can expense up to $125,000 of qualifying business assets. Though subject to limitations, the deduction is available whether you finance assets or buy them outright.

3. Plan for retirement. Establish and fund a qualified retirement plan before December 31 and you might be eligible for federal tax credits in addition to a deduction from your business income.

The credit for small employer pension plan startup costs reduces your tax liability by as much as $500 in each of the plan's first three years.

You may also qualify for the qualified retirement savings contributions credit on your personal return, which can save up to $1,000.

Other tax-saving strategies include hiring family members and paying year-end bonuses. We'll be happy to help you maximize business tax benefits. Give us a call.

Questions for our Financial Expert?
E-Mail us at: finance@ClevelandSeniors.Com