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-   -   Can you NOT take deductions on your tax return? (http://www.early-retirement.org/forums/f28/can-you-not-take-deductions-on-your-tax-return-30757.html)

summer2007 10-19-2007 08:35 PM

Can you NOT take deductions on your tax return?
 
I have a small business that I would like to contribute more to a roth 401k with. But I have a lot of equipment being depreciated that makes my actual taxable income small.

I was wondering if you can just not take deductions like depreciation and mileage and some things like that to raise the amount of taxable income to be able to contribute more to a roth 401k plan, and if this would cause problems in the future if you did take these deductions?

Thanks

Jim

old woman 10-19-2007 10:18 PM

If you don't take depreciation you will still have to add the depreciation to your basis. Mileage they don't have any way to know if you don't tell them. You could claim more income they wouldn't suspect you didn't have the income.
Try to move some income to the year you want it in. If you are cash basis and want income for 2007 send you invoices early offering a small discount to have them pay early. To get money in a later year save any checks from the end of december until jan. Also decide which year to pay bills don't pay your december bill until Jan 08.
If you are accrued basis adjust inventory or bad debts.

Texas Proud 10-19-2007 10:50 PM

There is no REQUIREMENT to take a deduction... it is your choice to take it..

But as old woman pointed out, when you sell an asset that you can depreciate your basis is the cost minus depreciation allowed or allowable... so you don't get to take it in another year...

Are you that low? BTW, you will still owe SS tax on your new found income...


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