Tax Saving Tips

The American Recovery and Reinvestment Act of 2009, signed in mid-Feburary provides several tax saving options for businesses.

1) Equipment Expensing

Small businesses can deduct up to $250,000 a year in new equipment purchases, including technology such as servers, PCs, networking equipment and off-the-shelf software. Typically you would have to depreciate these items over 5 to 7 years.

2) Bonus Depreciation

If you purchase $500,000 in equipment in 2009, $250,000 can be immediately deducted in 2009 plus half of the remaining balance ($125,000).

3) Other Tax Benefits

If you lost money in 2008 but were profitable in prior years, you can carry back that loss to prior year tax returns by amending tax returns as far back as 5 years. Previously you could only go back 2 years. To qualify you must have $15 million or less in gross receipts.