2009 BUSINESS YEAR-END TAX PLANNING

Dear friends of RC Jones & Associates

Despite conventional wisdom, year-end planning isn’t just for personal tax savings. There’s plenty a small business owner or manager can do between now and Dec. 31 to cut taxes in 2009. Furthermore, new legislation may give a boost to year-end tax planning for your business. Consider the following points:

• Under the Section 179 “expensing” deduction, a business can write off the full cost of certain business assets, up to a dollar cap. For 2009, the new economic stimulus law preserves the maximum deduction of $250,000 initially limited to 2008.

• Take advantage of bonus depreciation. For qualified assets placed in service in 2009, you may claim an extra 50% deduction in addition to available Section 179 and regular depreciation deductions.

• Increase your business driving or decrease personal driving—or both—to preserve top deductions for personally-owned vehicles. In lieu of deducting actual expenses, you might use the standard mileage rate. The rate for 2009 is 55 cents per mile (plus related tolls and parking fees).

• If your company operates on the accrual basis, fix bonus amounts before Jan. 1, but pay them early next year. Generally, the bonuses aren’t taxable to employees until 2010, but can be deducted on your company’s 2009 return so long as they’re paid by March 15, 2010.

• Nail down current deductions for repairs to business premises by scheduling them separate and apart from major renovations. As opposed to repairs, capital improvements aren’t deductible but are instead added to the “basis” of property.

• Keep detailed records of collection efforts to support deductions for bad debts that became worthless in 2009.

• Reschedule business trips planned for early next year to December to increase travel deductions for 2010.

Obviously, this is only a quick summary of several popular tax techniques. Give us a call at (816) 792-9966 for more in-depth information about year-end planning for your business.

Very truly yours,

Robert C. Jones

www.rcjonesinc.com