The Tax Goddess Blog

The new depreciation limits - $250k - they want us to spend!

Morning everyone,

So, if you didn't know - the depreciation limits for the §179 deduction have been raised to $250k for this year (2008) and going forward.  This limit applies to any equipment, major manufacturing dollars spent, etc. 

Be warned!  Do NOT listen to many of the car manufacturers as only CERTAIN vehicles can use this limit, most autos are capped at the $25k limit for depreciation in a single year.

If you want to know if your new potential car or truck falls under the new raised $250k limit, you need to know that in order to qualify the vehicle must be:

Vehicle must weigh more than 6000 lbs GVWR and
Vehicle must be built on a TRUCK chassis or
Vehicle bed must be more than 6 feet in length or
Vehicle can seat more than 9 passengers behind the driver

(there are more regulations that are for more specific types of vehicles, so make sure you ask your Tax Goddess if you have more questions!)

So, for those of you who need more deductions at year end, want a new truck?

How to Survive an Audit

One of the biggest questions that I get is "how long do I need to retain my documents for tax purposes?"

Well, for any normal circumstances really only 7 years
(if you plan on committing tax fraud, keep them forever- the IRS can go back and look at ALL of your tax filings, forever, if you commit fraud!)

Now, what should you keep?

- Anything relating to real estate (Keep these FOREVER as well - you never know what the IRS is going to try to pull when it comes to these larger dollar amounts)

- Receipts for anything you are trying to deduct.  The IRS accepts bank statements, original bank statements, (with the creases from the mail and everything, not the printed out ones that you can manipulate from the computer), about 80% of the time to back up a deduction.  The receipt with WHO, WHAT, WHERE, WHEN & WHY is the only 100% acceptable method of proof for most agents

- Daily planner, or meeting book, or a print out from your PDA of your meetings, the same 5W's as above apply!  This helps you with your mileage backup!

These are just a few of things things necessary to help you survive an audit!  If you are in an audit already, make sure you CALL FOR HELP to your CPA (Shauna can be reached at 602-357-3275 or at shauna@swcbe.com

Tax Planning - the best idea yet!

So, I will make it brief,...

most people like to budget, know when their $ is going to be needed.

Wouldn't you also want to do that with your taxes?  Be prepared - be ready to pay the amount owed on April 15th rather than wait until April 15th to know?

So - the idea is to "plan" for your taxes, thus the year end taxes planning meeting.  You figure out what you want to owe by figuring out what you would hypothetically owe and then make decisions to alter your final tax outcome (like contributing to a retirement plan, etc.)

Point is - if you haven't done your planning, you are playing into the government's taxing hands.  Do you want that?

No?  Then Setup a planning meeting with your CPA (or with me!  I can always help you in this area!) by sending them an email asking for some planning.

Always yours,

Your Tax Goddess.

Sorry it's been so long! - but new news on how to increase the value of your business for sale!

Do you Know???

So, the other week I went to a fabulous presentation put on by some Exit Strategy folks down in Mesa.  They were discussing how to increase the value of your business upon sale.  Below are some of the tips and tricks that they were talking about, and a lot of them are items that you would want to begin implementing now - many years before the sale - so that the true value can be obtained!

• Run Your Business Like a Business:

• Do not use the business bank account as your personal bank account! 
• Taxes should not be the main motivator (hmmmm???  well, I guess you are right there!) i.e. don't always lower your taxes or your bottom line looks horrible to a buyer! 
• You WANT to have Profits, a strong bottom line, and positive cash flow!
• Present your Business Like a Business
  • It is important the visual appeal of your location and image
  • your Books should be accurate and well maintained
  • Your records should be well documented (Sales, customer lists, contracts, etc.)
• You want to have characteristics that will LOWER the perceived risk for your potential buyer
  • Have Stable, Motivated Management
  • Have operating systems that help with cash flow
  • have a solid and diversified customer base
  • have a realistic growth strategy
  • have effective financial controls
  • use Customer Relationship Management programs
  • have office documentation (an owner's manual to your office)

All of these together will increase the value of your business to a potential buyer!

So, If you have any questions on other ways to make your business more valuable PLEASE speak with your CPA (our Tax Goddess can be found here if you have any questions)!

Looking our for your best interests,

Your Tax Goddess~
Shauna~