With tax day fast approaching, CPAs may be feeling stressed. However, they may be able to make their own lives, as well as those of their small business clients, a little less tense by encouraging those clients to consider certain business expenditures before the upcoming tax season, according to Hewlett Packard and H&R Block.
Here are the tips provided by HP and H&R Block:
· Replace old technology. Business owners can use the congressional tax break to invest in new technologies; in addition to the tax break, PC prices have dropped more than 40 percent since 2002.
· Depreciate computers and electronic equipment. Computers, handhelds, scanners and copiers used for personal purposes may be eligible for a limited depreciation deduction if they are also used for business.
· Take advantage of PCs. Using your PC for bookkeeping and other small business processes can help increase productivity and streamline operations.
· Consider bonus depreciation. A 50 percent bonus depreciation bonus is available during the first year of service on certain capital assets acquired after May 5, 2003, but before Jan. 1, 2005.
· Look into leasing. Small businesses may be able to triple what their budget would ordinarily be able to support through leasing technology.
· Take security precautions. Make sure that your PC and software are up to date to avoid being the latest identity theft victim.
· Recycle technology. Many states offer tax credits for individuals or corporations that recycle equipment; major computer vendors let customers return hardware through take-back and recycling programs.
· Donate PCs to charity. Many charities accept old PCs as part of their exempt functions, and companies can use these programs to trim bloated inventory, obtain tax deductions and give back to the community.
· Check the R&D Credit. Companies may be able to take a 20 percent credit for the cost of technology research intended to be useful in developing new or improved business components.
· Keep it in the family. The salary paid to a family member is a business deduction.
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