Dollars & Sense
Income Tax Time
These tax tips are presented by PBS Tax & Bookkeeping Service. PBS specializes in services to the transportation industry and has been providing expert tax and bookkeeping services to truckers nationwide for over 25 years.
Tax Tips
•On the purchase of new equipment the maximum first year write off (depreciation section 179) for equipment acquired in 2007 and put into service in that year you can elect to write off up to $125,000, no matter when during the year it was put it into service.
But once your acquisitions reach $500,000, the first year write off will start phasing out. It is eliminated once the acquisitions total $625,000. For 2008 the first year write off is $128,000 and the phase out begins at $510,000.
•All taxpayers need a receipt for every charitable donation made. You can no longer deduct contributions without a cancelled check or receipt.
• If your doctor prescribes items or services that involve home improvements for a specific condition, many times those medical expenses can be deducted.
Examples include central air-conditioning to alleviate a respiratory condition, a lap swimming pool in the event you are allergic to chemicals in the water of public pools, an elevator for arthritics or heart patients.
Improvements to accommodate a disability are fully deductible without regard to any increase in value. These include the modification of kitchen cupboards or counters, railings and support bars in bathrooms, ramp ways and widening of doorways and halls, and grading the grounds around a home for easier access. If you rent and are not compensated by the landlord for the cost, medically related improvements are fully deductible.
•April 15th is the last day to make an IRA contribution (traditional or Roth). But your business can still set up a Self Employed Retirement Plan (SEP IRA) for 2007 until the extended due date of October 15th for individuals and partnerships, and September 15th for S-corporations.
A SEP IRA owner may contribute and deduct up to 25% of compensation up to $45,000 for 2007.
•If you move, remember to notify the IRS by filing Form 8822, Change of Address. Go to www.irs.gov to download form.
PBS is committed to providing the trucking industry with dependable quality service. If you have a tax question, would like further information or a free 2007 Income Tax Organizer, please call us at 800-697-5153 or visit our web site at www.pbstax.com .
Everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult with your own tax or accounting professional.