I was chatting with a fellow Mac and iPhone Developer yesterday and we were talking about taxes. I was telling him that one nice feature in the tax code is that business expenses aren’t taxed. Now it is silly to just spend your hard earned money on random stuff just to save on taxes. You really only need so many pens.
A better way to save on your taxes if you have a business is to focus your spending on things that improve yourself and your business. Here are some ideas:
1. Conferences, online training, and books – if you’re a consultant, you’ll be able to sell your services with more confidence and for higher rates if you improve your skills and knowledge.
Personally, I’m planning to go to WWDC 2009 and C4 this year. I’m probably going to buy the Icon Resource tutorials. And I’ve got an overflowing bookshelf at the Pragmatic Programmer.
2. Hardware – if you’ve got an older computer or a small screen, then a new computer or a bigger screen could help make you more productive.
I’m personally waiting until WWDC to see what new hardware is coming out and I’m keeping an eye out for good deals on 30″ monitors. Right now I’ve got a 15″ MacBook Pro and a 20″ iMac with paired 20″ Dell monitor – good enough for now. I think more screen real estate would help when I’ve got Xcode, Interface Builder, Photoshop, the app I’m debugging and the documentation all open at the same time.
3. Software – developers are creating new apps that can improve your workflow all the time. I once got in trouble for automating a 2 day process down to 2 hours because it reduced the workload at a big corporation I once worked at, but the people that depended on that process were really grateful.
Of course, if I weren’t the creator of WebnoteHappy, I’d buy a license to help with my web research. A happy customer named Doug Hogg wrote in the other day and said “It is the best program that I have found for doing research on the internet.”
Personally, I’m going to be buying ScreenFlow to help produce some screencasts that I plan to do for the next version of Webnote. I’m also probably to buy Base.app to help with my iPhone development which relies on SQLite for persistence.
If you’re an employee, you could still follow this same strategy, but you’ll have to clear a 2% threshold – so if you make $50,000 a year, you won’t be able to deduct the first $1,000 of expenses.
Hopefully this helps people save some money in taxes next year and also improve their businesses, their skills and productivity. Oh and buy from independent businesses when you can!