Years ago, the government gave us a new deduction called a “production deduction”. It started off at 3%, but over time has been going up. In fact, in 2010, it’ll be up to 9%.
I keep seeing this deduction missed on new client’s past tax returns. If you have a business that produces or improves something, chances are you’ve got another deduction coming. One return I looked at this past year would have saved about $5,000 in taxes if they’d taken this deduction. Wow! That’s a lot to leave laying on the table.
We’ll make sure they never miss it again.
February 22nd, 2009 at 12:33 pm
Dianne,
How Is the “production deduction” applicable to real estate property management for tax savings?
February 25th, 2009 at 3:00 am
The key is that your business must change or improve something. So, if all you’re doing is managing property, you probably don’t have this deduction. However if you are developing or significantly changing/improving a property, that could very well qualify.
If that’s the case, make sure you talk to your tax professional about that before you file you return.