Captive insurance companies have been growing by leaps and bounds. A captive is an insurance company that insures the risks of its parent company. It is owned by a parent or, at times, by the shareholders of the parent company. The operating entity insures all or part of its risks with its captive company. The captive may reinsure some or all of such risks, or may retain such risks. The benefits of a captive may be many, but the primary goal is to retain the profit that would have been made by an outside third-party insurance company or to provide coverage where coverage would not be available.

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With the soaring price of gasoline, the deduction for business use of your car is more important than ever. You have two options: Write-off the actual costs related to your business travel, or claim an IRS-fixed standard mileage rate for the number of business miles driven during the year. Assuming you’re eligible for either option, use the one that produces the larger deduction.

Standard mileage rate

The standard mileage rate takes the place of tracking costs, such as gas and oil, repairs, and insurance, relieving you of having to keep receipts for every gas purchase and other car-related expense. The standard mileage rate can be used whether you own or lease your car.

The IRS-set rate for 2008 is 50.5 cents per mile for the first half of the year and 58.5 cents per mile for the second half of the year. The IRS increased the rate in mid-2008 in light of ever-higher gasoline costs. Changing the rate during the year is a highly unusual step that the IRS had only done twice before -- in 1999, and again in 2005. However, even the higher rate may not fully reflect your costs.

Whether you deduct actual cost or the standard mileage rate, you can also deduct parking and tolls.

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A bevy of small-business tax bills were enacted before the holiday break. Here's three you need to know.

Just before Congress adjourned for the holidays, a bevy of tax bills made their way to the President's desk. Here's three small-business owners need to know.

The Tax Increase Prevention Act of 2007 hiked the exemption amounts for the alternative minimum tax, or AMT, for individuals in 2007, keeping more than 20 million taxpayers from owing this tax, which only applies when it is higher than the regular tax. Sole proprietors and owners of pass-through entities -- partnerships, limited liability companies, and S corporations -- take business-generated tax preferences and adjustment into account when computing their personal AMT, so they will see relief. (Caution: Exemption amounts for 2008 are set to revert to substantially lower levels unless Congress takes additional action.)

The Mortgage Forgiveness Debt Relief Act of 2007 is designed primarily to provide tax help for homeowner who refinance their loans and obtain debt relief in the process. It exempts from income the debt relief on qualified home loans.

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It's never too soon to start thinking about how to trim your tax bill for the year ahead.

The holidays are over. It's time to start putting your tax resolutions for the new year into effect. Here are a few simple ideas to get you started:

Keep better records. Create a file system to store business receipts. Track your odometer readings for every business trip taken in your personal vehicle, noting the destination and purpose of the trip. Protect your financial data by implementing backup systems, such as automated online backup solutions.

Add more to your retirement plan. The annual deduction limits for profit-sharing and simplified employee pensions (SEPs) are higher, so why not save more if you’re eligible. The more you put into the plan, the greater your tax deduction and retirement savings will be.

Upgrade your business equipment. Whether you can buy a new computer system or other needed equipment outright or must finance the purchase, you’ll be rewarded in two ways: A tax deduction and more operating efficiency.

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Trademarks, copyrights and patents aren't just for big corporations. Everything from your company's name to its management style is worth protecting.
Your most valuable real estate may be your intellectual property -- a name, a process, or something else so unique that it's worth protecting. Determine whether you have such assets that need protection and which type of protection is necessary so you can secure your legal rights.

Trademarks
Creating a company or product name, slogan, design, or even a sound or smell that is so identified with a company's brand are assets that can be trademarked. You aren't required to register a trademark, but doing so gives you the presumption of ownership, which means you have the exclusive right to use the mark or license it for 10 years, with 10-year renewals. Unauthorized use of your mark can entitle you to damages.

A trademark is shown by displaying the symbol ™; once federal protection is obtained, the symbol ® can be used.

Copyrights
Creative works -- literary, musical, and artistic -- can usually be protected for the life of the creator, plus 70 years. Copyright protection is shown by displaying the © or word "copyright," the year that the work was first published, and the name of the copyright owner (e.g., © 2007 Barbara Weltman).

Copyright protection isn't limited to the arts and can extend to Web sites, computer software, architectural designs and even recipes and formulas if accompanied by substantial literary explanation. You can't copyright information that is common knowledge and has no original authorship, such as height and weight charts and public documents.

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Don't assume your home-based business is exempt from taxes and labor laws -- even if you hire your teenager.

Working at home sounds ideal: Roll out of bed and in a few minutes you're at work.

Indeed, there are many advantages to working from home, including saving time and commuting costs, gaining the flexibility to combine work with family responsibilities, and the opportunity to be highly profitable (home-based businesses typically show a 36 percent rate of return compared with 21 percent for non-home-based businesses, due to lower expenses). But there are also a number of legal issues to address so you can stay out of trouble. Here are a key few:

Zoning
Determine whether local zoning law allows you to run your business activity from your home in a residential area. While there's usually no problem for a freelancer or Web designer, there can be limitations on a car detailer parking customer vehicles on the front lawn.

Also check on community restrictions if you live in a planned community or cooperative apartment. Covenants, conditions, and restrictions created by a homeowner's association or co-op board can be the last word on whether you can run a business from your home.

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Need a new company car? Why not get Uncle Sam to help pay for it?

For business owners, there are many hidden savings in the tax code. Take that new company car, for instance. If you're willing to jump through a few hoops, you can use the Internal Revenue Code to get the government to pay 40 percent or more of the cost of your new luxury car.

Here's how it's done. First, you need to own an interest in an active trade or business -- active meaning that it's some type of operating company or active business entity. You'll also need to create a new entity, a leasing company, that will purchase the vehicle and lease it to your active company. This entity must have flow-through taxation, preferably an S corporation, though other types of business entities without a federal level of taxation will work.

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The year is half over, but there's still time to salvage those New Year's resolutions to get your business in better shape.

Remember those great New Year's resolutions for making improvements to your company? With the year half over, how have you done? If you're like most small-business owners, you spend more time working in your business than on it, and you may have completely overlooked implementing those things that could greatly improve your business. Well, now's the time to take a fresh look so that you can put your ideas into action -- and still make this year the kind of year you had resolved it would be. Some key areas to consider are sales, customers, employees, taxes, and strategic planning.

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