BUSINESS TAX ARTICLES

8 Small Business Tax Strategies to Reduce Income Tax
Does the amount of income tax you paid last year make you shudder? You can't avoid income tax, but there are tax strategies that you may be able to use to reduce the amount of income tax you pay if you operate a small business in Canada.

A Family Member In Your Business
At some point, almost every small business owner considers hiring a spouse or child in the business. Their availability, flexibility and familiarity can make them attractive employees. There may even be some tax advantages. However, there can also be disadvantages to these types of arrangements.

Tax Changes for Small Businesses - From the IRS Jan 2011
During 2010, new laws, such as the Affordable Care Act and the Small Business Jobs Act of 2010, created or expanded deductions and credits that small businesses and self-employed individuals should consider when completing their tax returns and making business decisions in 2011.

Tax Incentives For Employing A Spouse
A common approach used by many business owners is to hire their spouse as an official employee. Hiring your spouse as an official employee can have some disadvantages; however, there are least six tax benefits you can receive from taking this approach. The following tax benefits may be applicable to you:

Reduce Taxes by Renting or Selling Property to a Closely Held Business
As a business owner, you're doubtless looking for ways to cut taxes on your earnings from the business' operations. If you operate your business as a regular C corporation, there are two levels of tax to worry about.

Is a C Corporation Right for Your Business?
One of the initial decisions a new owner faces when starting a business is choosing the most advantageous business form for tax and legal purposes. This is commonly referred to as the choice of entity decision.

Get (Tax) Credit for Your Good Deeds
Congress has given employers several incentives to help their employees and go "green." Providing fringe benefits such as a pension plan or help with employee childcare entitles certain employers to a credit against their federal income tax. In addition, the cost of complying with the Americans with Disabilities Act, or purchasing a qualified hybrid motor vehicle can qualify for a credit.

Driving the Company Car
There are many valid business reasons for having a company car. For example, most businesses will need a car at some point so that the owners or employees can visit customers, make deliveries, and travel to industry conferences. Expenses related to cars that are used 100% for business purposes are fully deductible by the business.

Corporate Annual Meetings Are Important
Generally, one of the requirements for maintaining a corporation's existence (and the liability protection it affords) is that the shareholders and Board of Directors must meet at least annually.

Converting a Sole Proprietorship to an LLC
As sole proprietors, business owners enjoy the advantage of simplified income tax reporting. However, sole proprietorship status can expose a business owner's personal assets to the risks and liabilities of their business operation.

Home Office Deductions
If you are self-employed (or considering becoming self-employed) and working out of an office in your home, there are strict rules that apply to deducting expenses related to a home office. If you are able to meet these requirements, the expenses related to your home office will qualify for the more favorable treatment as above-the-line business expenses.

Is an S Corporation Right for Your Business?
S corporations offer their shareholders many advantages. One major advantage of an S corporation, as opposed to a partnership, is that an S corporation offers liability protection to its shareholders.

Planning for C Corporation Distributions
Historically, dividend treatment has been something to avoid because of the double taxation issue. Essentially, your C corporation pays income taxes on the earnings that generate the dividends, then you also pay income taxes when the earnings are paid out to you.

Business Benefits of the Stimulus Act
As you have probably heard, the recently enacted Economic Stimulus Act of 2008 (Stimulus Act) provided tax rebates for millions of individuals.

Are You a Business Owner or Hobbyist?
Many of us would like to turn our hobby into a regular business. That's fine as long as the business turns a profit. And, it may be fine as well if the business produces a loss and you enjoy the activity; even better if the loss can offset income from your day job.

Congress Extends Numerous Tax Breaks
The recent Tax Extenders and AMT Relief Act of 2008 (Extenders Act) provides extensions for several popular tax breaks and the addition of several new relief provisions, including disaster-area tax relief.

Managing Business Net Operating Losses
We previously touched upon current poor economic conditions and the need to control expenditures, particularly during tough economic times. But, the anemic economy has also impacted small business owners, many of whom may have an operating loss for 2008.