Timely Tax Tips
There are a number of steps that every gift retailer can take to minimize taxes. Here are a few.
This is the first year in which gift retailers can convert funds in regular Individual Retirement Accounts to Roth IRAs regardless of income levels. Retailers can defer the tax bill for the conversion until 2011 or 2012.
Many gift shops can choose to be the type of business entity that offers the most favorable tax outcomes. Not only can a partnership choose to be treated as a corporation, separating the partners from the business, the members of those increasingly popular limited liability companies can choose to be treated as either a corporation or as a partnership for tax purposes. And, best of all, it can all be accomplished by simply “checking-the-box.”
Ignoring an immediate expense deduction or write-off is often difficult. But if you had lower sales in 2010, delaying tax deductions and write-offs will mean a lower tax bill down the road in more profitable years.
GIFT SHOP and the author are not responsible for the advice in this article. Seeking professional help is always recommended.