Deductions and Write-Offs

Costs incurred in entertaining customers, prospective customers, clients, suppliers, employees and other business associates are valid business expenses that are subject to conditions and restrictions.
For entertainment costs to be deductible, the following must be documented; the time, place and the nature of the entertainment, a description of the business purpose involved, the amount of each separate expense, the business relationship and identification of the persons entertained.
A calendar diary is recommended to maintain this information.

The first year limit for cars placed in business service in the current year is $11,160, if you elect the special depreciation allowance for qualified passenger auto's.

Land is not depreciable.

Farmland is not depreciable. Farm Buildings and machinery used on the farm are depreciable.

Trees and bushes planted on your business property can be depreciated over a 15 year period. Landscapping service expenses can be deducted in the year performed.

You may be treated as actively participating if for example you participate in making management decisions or arrange for others to provide services. Examples of management decisions are, approving new tenants, deciding on rental terms, approving capital or repair expenditures and other similar decisions.

A gift tax return must be filed on IRS Form 709 for any gift given an individual other than your spouse if the gift exceeds $14,000 ($13,000 in 2012).
A return does not have to be filed for gifts qualifying for the medical expenses or tuition exclusions.

The Gift tax return, Form 709 is due to be filed by April 15th of the year following the year of the gift. Extension forms may be filied if needed.

The IRS has announced that interest rates will not change for the first quarter of 2012, which begins on January 1, 2012 and goes through March 31, 2012. Interest Rates for Q1 2012
IRS interest rates will continue to be charged as follows:
•3% for overpayments (2% for corporations)
•3% for underpayments
•5% for large corporate underpayments
•0.5% for the portion of a corporate overpayment in excess of $10k.
Additionally, the 3% IRS underpayment interest rate applies to estimated tax underpayments for the first quarter of 2012 and will continue through April 15, 2012. The federal short-term rate will also remain the same throughout this period of time.