By the Equipment World Staff
Managing your tax burdens and leveraging tax incentives will improve your cash flow. Keep these suggestions in mind:
1. Double bonus depreciation – full expensing! It’s especially important for fleet owners this year to know lawmakers have extended and doubled bonus depreciation, allowing full expensing for many assets placed into service through 2011. Property qualifying for bonus depreciation that is placed in service after Sept. 8, 2010, and through the end of 2011 will be eligible for full 100 percent expensing.
2. Review deferred compensation plans. Most contractors are struggling to remain profitable in this difficult environment. If your company cannot afford large bonuses to retain key employees, now is the time to revisit alternative compensation arrangements.
3. Certain S corporations should consider taking gains in 2011. If you converted to S corporation status in 2004 or 2005, consider sales of “gain” property in 2011. Special provisions enacted over the last two years provide a reduced seven-year period for sales that take place in 2009 or 2010 and a five-year period for sales of property during 2011.
