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In case you forgot, we're only days away from the April 15tax-filing deadline. If you waited this long to prepare yourreturns, odds are you expect to make a donation to the IRS. So hereare some last-minute tips that may help ease your tax burden.
Supporting rumors of a kinder, gentler IRS-particularly to smallbusinesses-the agency has set up a new feature, "SmallBusiness Corner," on its Web site (http://www.irs.ustreas.gov).It's designed to help you locate and understandbusiness-related tax information. There are five major sections:"Before Starting Your Business," "Operating YourBusiness," "Employment Taxes," "Reducing BurdenOn Small Business" and "Small Business News." Checkit out.
Another nice touch is the new IRS e-file program "PaymentOptions for Business Taxpayers." In essence, you can filepaperless returns more conveniently, and the process is faster andmore accurate.
Need more write-offs? Instead of depreciating assets purchasedin 1999, consider deducting the full cost now of tangible itemssuch as computers, tools, machinery, equipment, furniture andfixtures. The cap for such deductions (all assets combined) hasincreased to $19,000 in 1999 ($20,000 in 2000). Both new and usedassets qualify if purchased after you went into business, butbuildings, real estate, inventory and supplies don'tqualify.
Operating your business from home? This year, you're morelikely to be able to claim a home-office deduction. Qualifying homeoffices now include those used to conduct administrative ormanagement activities relating to your business-provided youdon't do those things in any other fixed location and you usethe area exclusively for business purposes. The IRS still has itseye on you.
But in case the agency isn't watching when you need itsadvice, you can get help 24/7 by calling (800) 829-4477. Needforms? Try the IRS Web site, where you can download and print morethan 600 federal tax forms (including instructions) and more than90 publications as well as access research tools, tax regulationsand FAQs. To have materials faxed to you, simply dial (703)368-9694. It may be too late to have forms and publications mailedto you (no charge), but if you want to try, call (800)829-3676.
In preparing your 1999 returns, be aware that:
Fully half of what you pay in self-employment tax is deductible.The tax equals the combined Social Security and Medicare taxes paidby employees and employers. What does the 50 percent write-offmean? If you're in the 28 percent bracket, you save $140 forevery $1,000 paid.
There's still time to shelter part of your income in a Keoghplan, Simplified Employee Pension (SEP) or a SIMPLE plan.Contributions to any of these accounts can be made as late as thefiling deadline and still earn a 1999 write-off. One hitch: yourKeogh and SIMPLE plans must already exist (as of December 31,1999). But you may still open-and contribute to-an SEP. Just do itby April 15.
The deduction for health insurance premiums rises by one-thirdthis year. Business owners and the self-employed can write off 60percent of the cost of health insurance for themselves, spouses anddependents in 1999, up from 45 percent the previous year.
Paul DeCeglie (MrWritePDC@aol.com) is a formerstaff reporter for Journal of Commerce and AmericanBanker.
