Tax Tips

Posted on | February 11, 2010 | No Comments

By Laura Opstad, CPA
www.llocpa.com

A few tips regarding 2009 business taxes.

If you want to do a contribution to a pension plan, you still have time.  Most contributions are deductible.

 IRS requires substantiation for travel, meals and entertainment.  In order to deduct the expense you must have the following information written down:

1. Amount of expense
2. Time and place of the expense
3. The business purpose – relationship of persons entertained, etc.

In a 2009 tax court case a taxpayer was disallowed a section 179 depreciation expense deduction because he did not have a mileage log to substantiate the use of a business vehicle.

Another taxpayer lost vehicle deductions on 13 vehicles because he did not have mileage logs.  IRS is really cracking down on documentation to support the business use of business vehicles.  By the time a case is settled, the cost to the taxpayer could put most small businesses out of business.

We have always told our clients to use mileage logs and provide them to the clients.  We have the 2010 logs in the office.  Please let us know if you need one.

If you provide retirement benefits or life insurance to employees, it is a good time to remind employees to review their beneficiaries.  People divorce, remarry, have additional children, and many other life events without changing their beneficiaries.  This can create major problems.

Although some dealerships are still trying to tell people they can completely write off a Hummer, you can never write off more than business use.  Many SUV’s are limited to $25,000 in the first year.

Laura Opstad is a member of the Tempe Chamber of Commerce and shares these tax tips with our readers as a certified CPA.

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