As a small business owner, it's wise to familiarize yourself 
with some key deductions that may reduce your tax bill for 2004. 


Employee Benefit Plans - You may deduct contributions to 
employee benefit plans (such as health insurance plans and 
retirement plans). Depending on your circumstances the maximum 
contribution that you may deduct per employee in a qualified 
retirement plan can go up to:

   $100,000 or more With a Defined Benefit Plan
   $44,000          With a 401(k) plan
   $41,000          With a SEP-IRA or Keogh


Automobile Expenses- You can elect to deduct the actual 
expenses incurred (including gas, oil, tires, repairs, 
insurance, depreciation, and rent or lease payments) for the 
business-related portion of your car or truck expenses, or 
simply take the 2004 standard mileage rate of 37.5 cents per 
business mile.


Social Security Taxes - You may deduct Social Security and 
Medicaid taxes paid to match required withholdings on employee 
wages, federal unemployment taxes, as well as real estate or 
personal property taxes paid on business assets. 


Home Office - Depending on whether you use your home or other 
real estate for business purposes, you may deduct some or all 
of any mortgage interest paid, as well as some or all of the 
maintenance and repair expenses associated with the property. 
The cost of utilities and business supplies associated with 
business use are also deductible.


Depreciation - Depreciation may be taken on passenger cars, 
equipment used for entertainment or recreational purposes 
(i.e., photographic equipment, cell phones and computers), 
as long as these items are used solely for the business.


Bonus Depreciation - The "bonus" depreciation deduction of up 
to 50 percent of the cost of new business equipment in the year 
of purchase applies only to property placed in service on or 
before December 31, 2004.  You may want to consider making any 
significant equipment purchases before year-end to take 
advantage of this expiring provision. 


Professional Fees - You may deduct professional fees, such as 
those paid to a lawyer or accountant.


Meals and Entertainment - You may deduct 50 percent of meal 
and entertainment expenses associated with the conduct of 
your business.


State and Local General Sales Tax - Beginning in 2004, you will 
have the option of electing to take an itemized deduction for 
state and local general sales taxes in lieu of the itemized 
deduction provided for state and local income taxes. 


Charitable Donations of Vehicles – Through 2004, a deduction 
equal to the fair market value of a donated vehicle is allowed. 
Starting next year, however, the deduction allowed will generally
be limited to the gross proceeds from the sale of the vehicle by 
the charitable organization. 


Remember to keep on file the records and documentation necessary 
to substantiate all of your deductions. You should consult a tax 
preparer or professional tax advisor to determine how specific 
tax rules may impact your individual situation. 

Daniel Lamaute specializes in setting up retirement plans for the
self-employed.  Visit http://www.investsafe.com  to learn about 
methods to maximize retirement contributions and to reduce taxes 
and penalties on early withdrawals.