| Tax Strategies To Save Even More | | | | leasehold improvements this way, both you and your |
| Here are some not so traditional ways we have | | | | landlord can save money on taxes. |
| advised our clients to save taxes. We try to keep you | | | | Ordinarily, you must deduct the cost of leasehold |
| informed and welcome any questions. | | | | improvements made to your place of business |
| Funding Your IRA With Previously Contributed Funds | | | | amortized over 39 years. If the year your lease term |
| This is definitely pushing the envelope but is allowed by | | | | ends you move to another location, you can deduct |
| the IRS. If you don't have enough cash to make a | | | | the portion of the improvement cost you have not |
| deductible contribution to your IRA by April 15th, here is | | | | previously deducted. This normal scenario won't save |
| how you can still take the tax deduction. And have until | | | | you tax in the earlier years of the lease. Your landlord |
| June 12th to make the full $5,000 contribution for 2009! | | | | will have to put up the initial cash for the improvements, |
| Remember, extensions are not factored in to the due | | | | but you will cover that over time with increased |
| date of IRA contributions. To get started, all you need | | | | payments in your rent. Because your landlord will be |
| is a previously started IRA. | | | | paying for the improvements, you will save tax early in |
| Start by having $6,000 distributed to you from your | | | | the lease and your landlord will benefit as well! |
| IRA on April 15th. Your bank is required to hold 20% | | | | How does this help the landlord? During the same time, |
| for income taxes so you'll actually receive $5,000. | | | | your landlord will gain depreciation deductions for the |
| Once you have the $5,000, immediately deposit it back | | | | cost of the leasehold improvements. When you leave, |
| into your IRA. If you do this before April 15th it will | | | | your landlord will still have the improved property to |
| count as your deductible contribution for the year. The | | | | offer other future tenants. It is a great opportunity for a |
| best part of this is that you have 59 days to "make | | | | win-win situation giving you faster access to invested |
| up" the withdrawal-or to be taxed. Simply deposit | | | | monies. |
| $6,000 into the same IRA account by June 12th to | | | | Using Home Entertainment to Increase Deductions |
| avoid taxes on the original $5,000 distribution made to | | | | There are two basic kinds of entertainment expenses: |
| you. This is a type of short-term loan from your IRA to | | | | Direct entertainment expenses and associated |
| make this year's deductible contribution before the April | | | | entertainment expenses. |
| 15th due date. | | | | If you entertain at your residence and it has a business |
| Not all banks realize it is required to withhold the 20% | | | | purpose, and if the business takes place during the |
| from the original $6,000 withdrawn from your IRA. | | | | entertainment, then the cost of entertaining at your |
| There are many options, so get informed before you | | | | home is deductible as a direct entertainment expense. |
| miss out on the full benefits of your retirement plan. | | | | However, if the entertainment occurs immediately |
| Have Your Landlord Pay for Improvements | | | | before or after a business meeting, the cost is |
| This strategy relates to something we worked out for | | | | deducible as an associated entertainment expense. |
| a client and saved them considerable tax dollars. | | | | These expenses are 50% deductible. |
| Instead of paying for leasehold improvements at your | | | | Many businesses are already enjoying this tax |
| place of business, you can ask your landlord to pay for | | | | strategy and are benefiting from it with a more social |
| them. In return, you offer to pay your landlord more in | | | | climate for conducting their business. |
| rent over the term of the lease. By financing your | | | | |