Don’t repeat the mistakes of 2008. Here, several tax experts outline tax strategies to garner capital for your business in these tough times:
Net Operating Loss (NOL) Carryback. For example, if you lost $1 million in 2008 but claimed a $500,000 profit in each of the previous two years, you can “carry the loss” backward by having your accountant amend your 2007 tax return to offset the entire profit for that year. You would then be due a refund on any federal taxes you paid on that profit. You would still show a loss balance of $500,000, which you could carry back to 2006 and offset your profit for that year as well because the economic recovery package just passed extends company’s ability to use the carryback strategy to five years (originally it was two years).
Section 179 Deduction. “Supercharge” your deductions using this method. Instead of depreciating your purchases for up to 10 years, take a one-time deduction to get a bigger portion of the cash now.
For more tips on using estate planning and unsold inventory to work for your business this tax year, click here.
Source:
CNNMoney: 2009: Keep More Cash!
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