American Express has created a Web site to help small-business owners learn about new tax developments and interact with other entrepreneurs on tax issues.
New tax developments include:
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Higher first-year deductions for certain assets, including computers and phone systems, rather than having them depreciate over time. These deductions have increased to $100,000 from $25,000.
Off-the-shelf software, or software that is available to the public, is now eligible for first-year expense deductions.
People who are self-employed can deduct 100 percent of qualified insurance expenses, up from 70 percent.
The standard mileage rate used in deductions decreased to 36 cents per mile from 36.5 cents.
The site is at www.open.americanexpress.com/taxcenter.
50-plus set favors entrepreneurship
A study examining trends in self-employment among people 50 and older found that entrepreneurship is particularly active in this population.
In 2002, 5.6 million people 50-plus–or 16.4 percent of this age group still working–were self-employed in a business as their primary job. This compares with 10.2 percent among all workers who were self-employed, according to the study, which was was released by AARP.
The study also found that self-employed older workers on average had higher incomes and wealth than the general workforce.
However, those who started self-employment after age 50 tended to have lower incomes, which indicated self-employment was a way to supplement their income.
Self-employment declined overall in the 1990s, but the study found that trend will reverse as the U.S. population ages.
Lynn A. Karoly and Julie Zissimopoulos of Rand Corp. completed the report for AARP. It is available at http://research .aarp.org/econ/2004-03-self -employ.html.
Health accounts focus of Web site
Dan Perrin, executive director of the HSA Coalition, has launched a Web site to answer questions about health savings accounts.
The HSA Coalition is made up of non-profit organizations that worked to create these accounts.
The Web site includes news items and archives about health savings accounts, commonly asked questions and answers, and a list of insurers that offer the accounts.
Approved by Congress last year, the accounts let Americans set aside pre-tax income to pay for medical expenses, including co-payments and prescription drugs that are not covered by insurance.
The site is available at www.hsainsider.com.