Small Business and the Economic Stimulus

President Obama's stimulus package has been making headlines quite a bit lately, and it certainly seems to be moving ahead. One thing I am disappointed is to see small business largely ignored.

Originally I thought the stimulus package was supposed to set forth some incentives, such as tax breaks, for businesses to create jobs. Since unemployment is a major part of the economic problem, and since small businesses employ a large percentage of the working population, I think this really should have been included — but it doesn't sound like it will be after all.



So now I guess businesses are back to relying on traditional forms of expenses and tax breaks in order to reduce their net income and their tax liability. For instance, making darn sure you expense everything you possibly can (legally though, folks!) and making sure your business property is amortized correctly are two ways of reducing your tax liability.

Business property is too big of an expense to take all in the year you buy it, so the cost is generally amortized over a certain period of time. If you don't classify it correclty, it could be spread out over too long a time, and you will be paying too much in taxes. Correcting this is known as cost segregation. A net present value calculator is a good tool for determining whether you can benefit from this.

What ways do you use to reduce your tax liability? (Only legal suggestions, please!)