Special 2010 Tax Write-Offs for Your Small Business

There are several new tax write-offs for business that are exclusive to 2010. If you are self-employed or a small business owner, it is important to take every write-off opportunity that is available. Below is a guide to the new write-offs for 2010.

General Business

For those of you who were affected by the Alternative Minimum Tax (AMT), these might be a little tax relief for you coming. Basically, for those who have to calculate both AMT and regular taxes, you would have to pay whichever came out to be more. In 2010 though, you will be able to deduct General Business Credit for the AMT. This will help you to lower the amount that you would have normally had to pay under the AMT calculations. Although you will still have to pay whichever comes out higher, the AMT amount which usually is will be less than normal.

Health Care

If you own a small business you may be eligible for the health care credit. If you foot the bill for a minimum of half of your employee’s health care coverage, you will be getting a refund. Smaller business will be receiving the maximum credits and those with businesses of over 25 however with salaries above $50,000 will be the cut off for the tax write-off.

Bonus Depreciation Extension

The bonus depreciation extension allows you to get more cash up front instead of having to slowly write it off. While you can only deduct new business equipment, you will be able to take advantage of this deduction whether or not you made a profit in 2010. If the item was purchased before September 8, 2010 you can deduct 50% while those made after can take the full 100%.

Business Car Depreciation

Those who bought a new truck or car during 2010 can take advantage of the business car depreciation deduction. You can add an extra $8,000 onto the regular depreciation which allows more money for you.

Changes to Section 179

This deduction is out there to help small businesses specifically. It basically allows you to deduct the full cost of equipment for your business that was made in 2010-11. While buildings cannot be deducted, computers, software and other equipment can be. This deduction is for the most part, allowing you to get the money upfront instead of having to write it off slowly. Note that this deduction can only be made if your business profited that year.

Self-Employed Health Insurance

Starting in 2010, those who are self-employed will be able to deduct their health insurance coverage costs from both business and self-employment taxes. For example, let’s say that you are self-employed and are making $60,000 a year with health care coverage costs of $5,000. Instead of past deductions where you would have had to pay income tax on $55,000 and $60,000 for self-employment tax, you will now be paying $55,000 for both. This can come out to a major deduction for many that are self-employed.