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Act fast to benefit from tax changes

Although the Internal Revenue Service is taking closer scrutiny over small businesses, small business owners have some taxdefensesmallopportunities for tax advantages, says Jacksonville-based Tax Defense Network (TDN). Some of these advantages, created through the American Recovery and Reinvestment Act (ARRA), are only available until the end of 2009.

• Faster write-offs for certain capital expenditures. Usually, any investments a business makes are recovered through annual depreciation over the years. But now, most or all of your property and equipment investments can be written off on your 2009 tax returns.

An additional “Section 179” deduction allows small business to deduct up to $250,000 of the cost of machinery, equipment, vehicles, furniture, and other qualifying property used in 2009. Before, the limit was $133,000. You can claim these on IRS Form 4562.

• Expanded net operating loss carry back. If you had expenses exceeding your income for 2008, you can carry the losses back for up to five years instead of the usual two. That means if you were profitable in the past but lost big in 2008, you could get a special tax refund this year. But act fast, the deadline to take advantage of this is Oct. 15, 2009.

• Exclusion of gain on the sale of certain small business stock. Investors in small business stock can now exclude 75% of the gain upon sale of the stock. But there is a catch. The stock has to be acquired after Feb. 17, 2009 and before Jan. 1, 2011 and held for more than five years.

• Estimated tax requirement modified. According to the IRS, many individual small business taxpayers may be able to defer, until the end of the year, paying a larger part of their 2009 tax obligations. For 2009, eligible individuals can make quarterly estimated tax payments equal to 90 percent of their 2009 tax or 90 percent of their 2008 tax, whichever is less. More details are available in Publication 505.

You only have a few months to take advantage of these deductions and save big on your taxes, double check with a CPA or tax relief professional to see if you qualify.

Source: Tax Defense Network,

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