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All articles by Daniel Lamaute -
As a small business owner, it's wise to familiarize yourself
with some key deductions that may reduce your tax bill for
2004.
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The American Jobs Creation Act of 2004 imposed strict new rules
on non-qualified deferred compensation plans. Beginning in 2005,
deferred compensation programs that are not in compliance with the
new rules may be taxed as wages, slapped with a 20% excise tax,
plus charged an interest penalty.
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A Savings Incentive Match Plan for Employees plan, better known
as a SIMPLE plan, is an IRA-based retirement plan available to
employers with fewer than 100 employees.
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A SEP is a special type of IRA. Under a SEP plan the employer
creates an IRA account for each eligible employee, hence the name
SEP-IRA. A SEP is funded solely with employer contributions.
Employees do not make contributions to their SEP-IRA retirement
account. Any money that goes into a SEP automatically belongs to
the employee. Thus, the employee has the right to take his SEP IRA
account money with him whenever he stops working for
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As a sole proprietor, it*s wise to familiarize yourself with the
some key deductions that may reduce your tax bill for 2004.
Small-business consultants generally recommend that you hire an
accountant to prepare your tax returns, payroll and financial
statements. But you should also meet with your accountant well
before the year-end rush to discuss such matters as tax planning,
and record keeping for tax deductions.
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