Tax Strategies LLC

Have Your Landlord Pay for Improvements

Funding Your IRA With Previously Contributed Funds

This is definitely pushing the envelope but is allowed by the Tax. If you don't have enough cash to make a deductible contribution to your IRA by April 15th, here is how you can still take the tax deduction. And have until June 12th to make the full $5,000 contribution for 2009! Remember, extensions are not factored in to the due date of IRA contributions. To get started, all you need is a previously started IRA.Start by having $6,000 distributed to you from your IRA on April 15th. Your bank is required to hold 20% for income taxes so you'll actually receive $5,000.

Once you have the $5,000, immediately deposit it back into your IRA. If you do this before April 15th it will count as your deductible contribution for the year. The best part of this is that you have 59 days to "make up" the withdrawal-or to be taxed. Simply deposit $6,000 into the same IRA account by June 12th to avoid taxes on the original $5,000 distribution made to you. This is a type of short-term loan from your IRA to make this year's deductible contribution before the April 15th due date.Not all banks realize it is required to withhold the 20% from the original $6,000 withdrawn from your IRA. There are many options, so get informed before you miss out on the full benefits of your retirement plan.

Have Your Landlord Pay for Improvements

This strategy relates to something we worked out for a client and saved them considerable tax dollars. Instead of paying for leasehold improvements at your place of business, you can ask your landlord to pay for them. In return, you offer to pay your landlord more in rent over the term of the lease. By financing your leasehold improvements this way, both you and your landlord can save money on taxes.Ordinarily, you must deduct the cost of leasehold improvements made to your place of business amortized over 39 years.

If the year your lease term ends you move to another location, you can deduct the portion of the improvement cost you have not previously deducted. This normal scenario won't save you tax in the earlier years of the lease. Your landlord will have to put up the initial cash for the improvements, but you will cover that over time with increased payments in your rent. Because your landlord will be paying for the improvements, you will save tax early in the lease and your landlord will benefit as well!How does this help the landlord? During the same time, your landlord will gain depreciation deductions for the cost of the leasehold improvements. When you leave, your landlord will still have the improved property to offer other future tenants. It is a great opportunity for a win-win situation giving you faster access to invested monies.

Using Home Entertainment to Increase Deductions Tax Strategies LLC

There are two basic kinds of entertainment expenses: Direct entertainment expenses and associated entertainment expenses.If you entertain at your residence and it has a business purpose, and if the business takes place during the entertainment, then the cost of entertaining at your home is deductible as a direct entertainment expense. However, if the entertainment occurs immediately before or after a business meeting, the cost is deducible as an associated entertainment expense. These expenses are 50% deductible.

Many businesses are already enjoying this tax strategy and are benefiting from it with a more social climate for conducting their business.Shaun Lawrence owns a small CPA firm in California that works out of offices in Newport Beach and Huntington Beach. His firm specializes in Income Taxes, Bookkeeping, & Financial Statements for individuals and small businesses. Shaun, a Orange County Accountant and Huntington Beach Accountant has a blog and provides articles on a regular basis to provide tax tips and strategies.
Tax Strategies LLC