The Tribune Democrat, Johnstown, PA

Business

November 23, 2013

THOMAS SEITZ | Year-end tax suggestions for businesses

— It’s not too late to make moves to reduce your 2013 taxes if you are a business owner.

• Use the new “streamlined” home-office rules. Many self-employed taxpayers declined to claim the home-office deduction because it was so complicated to compute. For 2013, the deduction is streamlined, allowing for a deduction of $5 per square foot, up to a maximum of 300 square feet or $1,500.

• Create a retirement plan. It’s not too late to create a retirement plan for yourself and your employees if you have them. The plans can be simple to set up and administer, such as a Simplified Employee Pension (SEP) plan. A 401(k) plan could be established even for a one-person business. While some of these plans must be established by the end of the year, most can be funded up to the extended due date of the tax return.

• Purchase business equipment. Up to $500,000 (scheduled to be reduced significantly to $25,000 in 2014) in business equipment purchases can be expensed this year, rather than being expensed over a number of years. Additionally, there is also a 50 percent bonus depreciation allowance (that will not be available in 2014) if your purchases exceed the $500,000 limit. 2013 might be the last year to maximize your equipment purchase deductions to such an extent.

• Deduct health insurance. If you are self-employed, you are allowed to claim 100 percent of the amount paid for health insurance for yourself, your spouse, and your dependents as long as you follow certain conditions.

• Consider credit card purchases. If you want to purchase equipment or supplies for your business before the end of the year, but you are cash-strapped, consider using your credit card. Your deduction occurs this year when the purchase is made, not next year when the credit card charges are paid.

For guidance with year-end tax planning for your business, contact our office.

Thomas R. Seitz is a certified public accountant at Wessel & Co.

1
Text Only | Photo Reprints
Business
Poll

Would you like to see the Johnstown Community Corrections Center remain open after its lease runs out on Oct. 11, 2015?

Yes
No
I'm not sure
     View Results
Order Photos


Photo Slideshow

House Ads