How To Save On Your 2007 Taxes
With tax time for businesses already past (you did file for an extension, didn't you?), and personal income tax deadline nearing (April 17 this year), there is little you can do to reduce your tax burden other than to hope you have a clever accountant. But it's never too early to plan for 2007.
Here are some tips gleaned from the lengthy list of IRS tax changes that go into effect for the 2007 tax year:
1. Depreciation and Section 179 Deduction: The maximum section 179 deduction you can elect for qualified section 179 property placed in service in 2007 has increased to $112,000 ($147,000, for qualified enterprise zone and qualified renewal community property). This limit is reduced by the amount by which the cost of qualified property placed in service during the tax year exceeds $450,000.
2. Self-Employment Tax: The maximum amount of net earnings subject to the social security part of the self-employment tax for tax years beginning in 2007 has increased to $97,500.
3.Domestic Production Activities Deduction: The domestic production activities deduction percentage increases to 6%.
4. Fringe Benefit Parking Exclusion and Commuter Transportation Benefit: The monthly exclusion for qualified parking increases to $215 and the monthly exclusion for commuter highway vehicle transportation and transit passes increases to $110.
I don't know how many people will benefit from this one, but, a 25% exclusion from gross income is allowed for long-term capital gain from certain conservation sales of qualifying mineral and geothermal interests located on eligible federal land.
Always check with a qualified tax professional or the IRS for more details.