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Save Taxes by Employing Family Members Employing family members (usually children or grandchildren) who are in a lower tax bracket than the business owner can shift taxable income to those individuals, thus reducing the family's overall tax burden. Not only is income shifted from the parent to the child, if the child is a minor, payroll taxes can quite often be avoided. In addition, the child's compensation is earned income, which allows the child to contribute to an IRA.

The New Health Savings Account The President recently signed legislation authorizing Health Savings Accounts (HSAs), which are targeted mainly at self-employees, small business owners, and employees of small to medium size firms. It is important to understand that, while this new tax break was included in the recent Medicare Act, you don't have to be a senior citizen to benefit.

Benefiting from the 50% Bonus Depreciation The Jobs and Growth Tax Relief and Reconciliation Act of 2003 increased the bonus depreciation rate from 30% to 50% of the adjusted basis of qualified property. The bonus depreciation is determined without any pro-ration based on when during the tax year the property was placed in service. So, even property placed in service on the last day of the tax year is eligible for the full 50% bonus depreciation amount.