NEW YORK--(BUSINESSS WIRE)--

1. Be aware that the first-year expense limitation for equipment purchases has increased to $19,000.
   
2. The self-employed can deduct 60% of their health insurance costs, up from 45% from 1998.
   
3. This is the first year that filers can take advantage of a broader definition of what the IRS constitutes as a home office, likely expanding the number of filers that can claim this deduction.
   
4. Separate your personal and business expenses. This makes tax time much easier and helps legitimize your business in the eyes of the IRS.
   
5. If you need to hire employees for your business, consider employing a family member. This will allow you to shift income to members in lower tax brackets so long as they provide bona fide services to the business. Spouse employees may be eligible for fully deductible health insurance.
   
6. A large percentage of small businesses utilize the services of independent contractors. Don't forget to file annual information returns (Form 1099-MISC) to both your contractors and to the IRS.
   
7. Medical Savings Accounts can be set up and contributions made to them through April 17, 2000.
   
8. You can make tax-deductible contributions to a qualified self-employment retirement plan up until the due date of your tax return.
   
9. If you started a business in 1999, now is the time to determine how you will treat start-up expenses. You can either add them to your basis in the business or amortize them over a period of 60 months.
   
10. If your business suffered a loss in 1999, you may want to consider carrying the loss back to generate an immediate tax refund or elect to carry your loss forward to 2000.

Excerpted from The American Express Tax Guide 2000, American Express Publishing.

Craig Minnick, Managing Director for American Express Tax & Business Services, and Sidney Kess, a contributing editor to the American Express Tax Guide, are both CPAs and attorneys.

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