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Improve tax savings by ignoring deductions.

Article Excerpt
WHY WOULD ANY STEEL DISTRIBUTOR ignore perfectly good tax deductions? Our complex tax rules and an Internal Revenue Service consistently on the lookout for missed income and exaggerated deductions paint a one-sided picture of our tax laws.

It is not easy trying to break a life-long habit of minimizing income and maximizing deductions in order to produce a low tax bill. Surprisingly, however, the lowest tax bills often result from legitimate tax deductions postponed or ignored.

A new service center has the option of deducting up to $5,000 in start-up and organizational expenditures in the year the company opens its doors. But why would it want to? If the new business has income, it will likely find itself in the lowest tax bracket. If those start-up expenses are ignored in the first year, they--and any start-up expenses that exceed $5,000--will be available for deduction ratably over the following 180-months. Thus, the $5,000 deduction deferred until later, more-profitable years will help reduce income that, in all-likelihood, will be taxed at a higher rate than it would as...

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