| Medical Reimbursement
Plans |
A corporation may establish
a medical reimbursement plan to reimburse any and all
necessary medical expenses for qualifying employees.
This includes insurance costs and health related costs.
This benefit is typically not available for S-Corporations,
but is available for C-Corporations. |
| Retirement Plans |
A number of retirement
plans are structured for small business owners including
traditional IRAs, simple IRAs, and Roth IRAs. It is to
your advantage to fully take advantage of tax deferred
retirement investment from your small business corporation.
|
| Cafeteria Plans |
You can establish cafeteria
plans for your corporation that reimburse medical, child-care,
tuition, and legal costs for selected employees.
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| Business Travel and
Entertainment |
When you travel on
business, your meals and travel costs are deductible as
regulated by IRS limits. By structuring your trips
properly, you can sometimes combine some vacation time with
your business trip in a tax advantaged manner.
|
| Business Vehicles |
Any mileage related to your
business is deductible in 2004 at a rate of $0.375 per mile.
You can own or lease a vehicle for business purposes. It
is notable that merely displaying a sign on the vehicle with
your business name does NOT make the vehicle deductible. |
| Home Office |
You can lease a portion of
your home at market-based rates (document them!) to your
corporation. Note that this portion of your home
will become a business asset and not receive the benefit of
the capital gains exemption if you sell your home.
|
| Employing Your Children |
You can employee children
of age 7 and over who are likely to have very low or 0% tax
rates. Typically, their income up to $4,750 is tax free.
The children must handle business related and necessary
activities that are properly documented. |
