Ten ways to save thousands

         Child Tax Credit
A credit for up to $1,000 per child for children under 17 and
a credit of up to 35% of the amount paid for childcare expenses that enable the parents to work.

SEP IRA and Single 401K

Deductible contributuions of up to $45,000 per employee, may be made before the due date of the tax return including extensions.   

Married Filing Separate
If you and your spouse earn more than $110,000 combined and you have children, you may be able to increase your child tax credit up to $1,000 per child, if you file separately.

S-Corporation
S-Corp profits may be allocated between the owner’s salary and owner’s draws. A lower salary allows for savings on payroll tax. Often $4,000-$5,000 per year or more. Salary must be reasonable for work performed.

1031 exchange
Also called a like kind exchange of investment and income producing real property. No taxable gain is recognized on the sale of such property if new “like kind” property is identified in writing within 45 days of the original sale. The new property must be received within 180 days after the sale or by the due date of the taxpayer’s tax return, whichever is earlier.

Enterprise zone credit
Does your employee live on Alamo Street in Richmond or on 18th Street in San Francisco? Is your business in one of these many enterprise zones? If so you may be eligble to receive a credit of up to 50% of the employee’s wages.

Restaurant Credit for FICA and Medicare tax paid on tips
This is a dollar for dollar reduction in the regular tax.

Home office deduction
is often available for people who work out of their homes.

Research and development credit
If you have research expenses that are technical in nature and for a new or improved business component you may be eligble to receive a credit up to 10% of those expenses.

C-Corporation Bonus
Dividend distributions from a corporation are taxable at 15%. If you have net income in your C-Corporation and would like to distribute funds without paying this extra tax on dividends, you may be able to take the distribution as a salary bonus. Compensation may be in excess of $1 million per employee if it is in line with industry standards and duties performed.