Mid-year Tax Planning: Tips on Business Income

We’ve reached the mid-year point and there is no better time than now to start your 2013 tax planning!

Several business provisions in the tax law are available ONLY through 2013. These include:

• Section 179 expensing of up to 500,000 of new or used equipment when total fixed asset additions do not exceed $2 million for the year
• A 50% bonus depreciation on new equipment
• A 15 rather than a 39 year cost recovery on qualified leasehold improvements and restaurant and retail assets
• Research and development credits
• The Work Opportunity Tax Credit

Starting in 2013, taxpayers may deduct annually $5 per square foot of office space, up to 300 square feet.

Certain deductions from gross income have been extended only through the end of the year, so it may be prudent to begin identifying opportunities to take advantage of those tax breaks. They include:

• The deduction of up to $250 for K-12 teachers’ expenses
• The deduction of up to $4,000 of tuition and related expenses (limited at higher income levels)

See also “Tips on personal income”: http://www.dh-cpa.com/404

Davis & Hodgdon Associates has been assisting businesses and individuals in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].