Car Depreciation

• Depending on when you placed your car in service, the type of vehicle it is and whether you claim the special depreciation allowance, the maximum vehicle depreciation you can take ranges between $1,675 and $11,160. You can carry over excess depreciation into future years. The vehicle can be a car, light pickup truck or van.
  
  

Business Use of Home

• Limits for deductions for business use of your home are determined on Form 8829 -- Expenses for Business Use of Your Home. You can include mortgage payments, interest, homeowner's insurance, repairs, utilities, rent and depreciation on your home.
  
  

Depreciation and Section 179 Deductions

• Instead of taking depreciation, you may be able to deduct expenses off the top as a Section 179 Deduction. You can claim this deduction only in the year the equipment is placed in service. The Section 179 Deduction is limited to a total of $500,000 per year; real estate property is limited to $250,000 per year. If the cost of your equipment exceeds $2 million, you must subtract the excess over $2 million from your Section 179 limit; for example, if your equipment is $2.2 million, the excess $200,000 is subtracted from the Section 179 limit, making your limit $300,000. You can carry over excess 179 deductions into future years.
  
  

Employee Payments and Benefits

• Employee achievement awards are based on a written plans are limited to $1,600 per employee per year. All awards not based on written plans are limited to $400 per employee per year. Gifts are limited to $25 for each person during the year. Long-Term Care (LTC) insurance you paid on behalf of your employees are limited according to age: 40 years old or younger -- $330; 41 through 50 -- $620; 51 through 60 --$1,230; 61 through 70 -- $3,290 and 71 or older--$4,110. LTC insurance policies must be guaranteed renewable and refunds must be paid to reduce future premiums of these policies. Meals and entertainment expenses are limited to 50 percent, regardless if you are self-employed or an employee of a company. You cannot carry these expenses over to future years.
  
  

Retirement Plans

• The limit for matching 401k retirement contributions is 3 percent of an employee's compensation for elective (optional) contributions and 2 percent of fixed non-elective (non-optional) contributions. If an employee makes $40,000, you can match up to $1,200 or $800 for elective and non-elective contributions, respectively. The limit an employee can contribute to a 401k plan is $11,500 per year ($14,000 if they are over 50). The absolute limit for any employee retirement plan contribution is 25 percent of an employee's compensation, up to $49,000 per employee. Self-employed retirement deductions depend on your net income from Schedule C -- Profit or Loss from Business. They are deducted separately as adjustments to income on Form 1040. You can deduct these expenses only in the year they are incurred.