We-re getting down to the wire for meeting the deadline for filing this year-s tax return, so if you haven-t already filed, it-s time to get busy! But before filing your 2010 small business tax return, take note of the following tax law changes - some of which are potential money savers. Even if you-ve already filed for this year, some of the changes extend to next year.
1) Mileage deduction rate - For 2010, the standard mileage deduction rate is 50 cents per business mile driven, which is down five cents from last year - when Uncle Sam allowed us to deduct 55 cents. Next year, it-s going up again - by a whole penny.
-That-s good news for small business owners and self-employed folks who are looking for an easy way to increase their business deductions for 2011,- says Wayne Davies, owner of Fort Wayne Tax Preparation Services. -Assuming you drive the same number of miles for business in 2011 as you did in 2010, your vehicle deduction will increase by two percent.-
Be sure you use the correct cents per mile, so you don-t trigger an IRS audit. Keep in mind, if you use your car, pickup, van, or panel truck (sorry folks, a golf cart probably doesn-t qualify) exclusively for your business, then you can deduct all of your business vehicle-s expenses. If you use your car for a mixture of business and pleasure, the tax man instructs you to divide up your vehicle expenses by actual miles - or you can deduct actual business vehicle expenses, if you have those records.
2) Environmental clean-up costs - Environmental clean-up costs are costs you incur to control hazardous substances. Although they are generally considered capital expenditures, the government allows you to deduct them as a current business expense - as long as you meet certain requirements. For example, the hazardous substances must be at a qualified contaminated site. This deduction election is extended to cover environmental clean-up costs incurred or paid in 2010 and 2011.
3) Business startup costs - Good news for startups: Business startup expenses, such as licensing, advertising, and research expenses paid (or incurred) after 2009 can be deducted - up to $10,000. Special rules apply for startup costs exceeding $60,000.
4) Self-employed health insurance deduction - Beginning March 30, 2010, if you are self-employed, you can deduct any health insurance premiums paid in order to provide coverage for your under-27-years-of-age child. Your child doesn-t have to be your dependent, but must have been under 27 years old at the end of 2010. Adopted children, foster children and step children are included in these criteria.
For more information on taking business tax deductions, visit Turbo Tax - Tax Calculator & Tips.Elizabeth Magill is a professional writer who holds an MBA. She spent over 10 years working in management in an investment firm in corporate America. Liz focuses her writing on small business, career and work, personal finance, and health. Her clients include The Motley Fool, Profitably, WorldStart. com, LIVESTRONG. com, Healthline, and many others. She's author of multimedia App and Vook Conduct a Job Interview: The * - Guide, blogger for IFXMedical. com, and contributing writer for Intuit Small Business Blog. View all posts by Liz Magill This entry was posted in Money, Taxes and tagged business expenses, tax deductions, tax law, Taxes. Bookmark the permalink.