HOW TO GET SLOW-PAYING CUSTOMERS TO PAY UP

You’ve done your part. The job is complete, your customer is satisfied -- but a month has gone by, and your invoice is still outstanding. You’d like to work with the customer in the future. So how do you get your money without losing the customer?

TAX RULES APPLY TO FAMILY LOANS

There are many worthwhile reasons to lend money to a relative. For example, you may want to help a child or sibling continue their education or start their own business. But lending money to relatives can have tax consequences.

WHAT TO CONSIDER BEFORE LENDING MONEY TO FAMILY AND FRIENDS

When your best friend views your nest egg as a source of start-up funds for his latest business venture, or your nephew hits you up for a car loan, your first impulse may be to reach into your bank account to help. But it's a fact that loans to family and friends often end up straining both finances and relationships.

CAN YOU QUALIFY FOR THE HOME OFFICE DEDUCTION?

The home office deduction is available when you use part of your home regularly and exclusively as your primary place of business, or for meeting clients.

If you're an employee who works from home, there's an additional rule: The exclusive use must be for the convenience of your employer.

In either case, "exclusive" is defined as "all or nothing." Conduct any personal activities in the space you've designated as your office and the deduction is lost.

But satisfy the requirements and you can write off part of the expenses of running your home, including utilities, interest, and property taxes, as a business deduction. That means those costs can directly reduce business income, saving you income tax. If you're a sole proprietor, the deduction may also reduce self-employment tax. Though the amount you can claim is generally limited to business income, disallowed expenses can be carried forward to future years.

What are the drawbacks? One drawback to taking a home office deduction is the potential for depreciation "recapture" that may apply when you sell your home, potentially reducing the amount of gain you can exclude from income.

Give us a call at (518) 798-3330. We can answer your questions about the tax requirements of a home office deduction in your particular situation.

BUSINESS TAX TIP

Keep repairs separate from major improvements. Ordinary repairs and maintenance on business equipment and buildings are deductible business expenses. Improvements which materially add to the value of the property or significantly prolong its useful life must be depreciated over a period of years. To avoid losing tax deductions for repairs and maintenance, make major improvements completely apart from repairs and maintenance.

CHECK YOUR 2012 WITHHOLDING

Withholding too much tax from your wages isn't a smart financial move. Match your withholding as closely as possible to your actual tax liability for the year, and invest the extra money for yourself, not the IRS.

TAX TIP FOR WORKING PARENTS

If you work and pay for child care, you may be eligible for the child care credit. Also, your employer may allow you to set aside part of your salary tax-free to pay for child care expenses. You may even be eligible for the earned income credit. And don't overlook the child tax credit for children under age 17.

SUPREME COURT RULES ON HEALTH CARE LAW

On June 28, the Supreme Court ruled that the "Patient Protection and Affordable Care Act of 2010" was constitutional, including the provision in the law requiring individuals to have health insurance coverage starting in 2014.

DON'T LET THE TAX TAIL WAG THE ECONOMIC DOG

Some tax-cutting strategies make good financial sense. Other tax strategies are simply bad ideas, often because tax considerations are allowed to override basic economics.