GET CONNECTED TAXES
Savvy strategies to help reduce your taxes

Taxing Answers
Small-Business owners can never have enough tax information. Now there's a new source to help answer all of your burning questions - the TaxbEAt newsletter from the National Association of Enrolled Agents (NAEA). The free electronic newsletter comes out monthly and offers useful tips to small-biz owners and individual taxpayers. To sign up for the newsletter go to the NAEA Web site, www.naea.org. Click on "Taxpayers," then click on "Taxpayer Registry" in the left-hand column. Just fill out and submit the brief form.

Get An Education - And A Deduction
Small businesses offering employer-provided educational assistance can reap some tax advantages from the Economic Growth and Tax Relief Reconciliation Act of 2001. The bill makes the exclusion for employer-supplied educational assistance a permanent part of the tax code and widens this benefit to include graduate as well as undergraduate coursework.

Employees can receive up to $5,250 a year from their employers to meet tuition and certain other educational expenses without having to declare the amounts as income or have any taxes withheld on the amounts. Employers, meanwhile, can deduct the amounts on their returns and they are not liable for employment taxes on the payments.

An above-the-line deduction also provides taxpayers a new and temporary way to cope with higher education expenses. For 2002 and 2003, the maximum deduction would be $3,000. It's available to taxpayers with adjusted gross incomes of less than $65,000 for single filers and $130,000 for joint filers. For 2004 and 2005, the maximum deduction would rise to $4,000 for taxpayers under those income limits; while people with incomes above those limits, but under $80,000 for single filers or $160,000 for joint filers, could deduct up to $2,000.

"If you're a small-business owner thinking of changing your career or getting into a new business that requires coursework outside your current field, the next few years -- while this deduction is available -- are an ideal time to go back to school and get the needed education," says Paul Gada, a tax attorney and small-business analyst for CCH Business Owner's Toolkit (www.toolkit.cch.com).