Holidays in the Northwest are wonderful. But holidays aren’t as fun if you’re an entrepreneur who hasn’t yet finalized your year-end tax strategies.

In order to make the holidays and your next return a little less taxing, here are 20 basic tips to discuss with your CPA by Dec. 31:

Equipment and capital assets. Under Section 179 of the Internal Revenue Code, most small businesses can deduct a limit of $108,000 toward the cost of new equipment, such as new vehicles. The limit is $25,000 for trucks and SUVs weighing more than 6,000 pounds. Asset purchases can be deducted this year instead of being amortized over the next few years. Actually, if you need a write-off for this year, such an investment for any size vehicle might be worthwhile for you.

Excluded are property purchased from a relative, inventory for resale, or real estate.

Auto expenses. There are two types of expensing automobiles from which you can choose: 1. Deduction of all business-related auto expenses. 2. The standard 44.5 cents per mile in addition to parking fees and tolls. For newer cars, the actual expense method is common. If you have claimed accelerated depreciation deductions in prior years, you’ll have to use the standard mileage rate.

Of course, if you just have one vehicle, you’ll have to distinguish between personal and business use.

Travel. Generally, you can deduct plane fare, gas, taxis, meals, lodging, shipping of business items, dry cleaning, telephone calls, faxes, online services at venues such as Kinko’s or hotels, and even tips.

But if you take your family along, you can only deduct your expenses used for your business purposes.

Moving expenses. The IRS doesn’t typically consider moving as business expenses. If you move 50 miles or more – you’ll probably be able to deduct certain moving expenses that aren’t considered personal expenses.

Professional fees. Fees for professionals, such as consultants, CPAs and lawyers are deductible during the period that their services are utilized. That also goes for business books in lieu of legal or tax professionals.

Software. You’ve got three years to depreciate software. But until 2008, you’ll be able to use Section 179 for deducting off-the-shelf software. When bundled with a computer system, it’s considered hardware to be depreciated over five years.

Business entertainment. You can deduct 50 percent of the cost if it is directly related or associated with the business discussion.

Bad debts. You can deduct the cost of goods for which you didn’t receive payment. However, you can’t deduct for losses of your time or services.

Interest expense. Business purchases and accompanying interest are deductible. Self-employed people will often use a personal loan for business, but it necessitates good record-keeping.

Advertising. Such promotional expenses are deductible as current expenses, such as Internet, radio, TV, newspaper or business cards.

Employee gifts. As long as the gifts don’t exceed $25 for each employee, you can deduct the cost. Gift certificates or cash, however, are subject to employee federal tax withholding.

Charity. You can claim a charitable donation when such donations are passed through to you for deduction on your individual return whether you’re a partnership, limited liability or an S corporation. Otherwise, the C corporation can deduct the donations.

Note: If you’ve fully depreciated equipment or furniture, you can’t claim a deduction for charitable contributions.

Expenses to establish your business. You can’t deduct expenses, such as advertising, office equipment or utilities, until your doors are open for business. Capital expenses with a limit of $5,000 can be deducted the first year. Leftover amounts are equally deductible over a 15-year span.

Otherwise, you might try to delay some expenses after you’re underway or limiting your business venture – if it’s obvious that you’ll immediately be profitable. But most businesses aren’t profitable for a few years, which is why they take the deductions over a five-year period.

Taxes. Generally, deductible taxes include sales tax on day-to-day operations, not large assets such as vehicles unless you take advantage of Section 179. Other deductible taxes include excise and fuel, employment taxes (not self-employment), and real estate and maintenance (not improvements).

Miscellaneous expenses. The following are deductible: audio and videotapes for business skills, bank service charges, business association dues, business books and periodicals, credit bureau fees, petty cash funds, online computer services, postage, casual labor, casualty and theft losses, beverage service, and commissions.

401 (k). Taxpayers can put a limit of $15,000 into their 401 (k), but Dec. 31 is the deadline. However, folks 50 and older have the option of adding an additional $5,000. Dec. 31 is also the deadline for starting a 401 (k) and that goes for a Keogh plan, too.

Paying enough tax. If you’ve had an especially good year, it’s important to pay enough tax with your estimated tax payments to avoid IRS penalties. You’ll probably be okay if you’ve paid the equivalent of their last year’s tax obligation or 90 percent of the current liability. If you filed an adjusted gross income of more than $150,000 in 2005, ask whether you should pay 110 percent of the 2005 return or 90 percent of your 2006 return.

Timing of income and deductions. It’s generally best to defer income and pay expenses now, if you expect to be in the same or lower tax bracket next year. True, you’ll pay higher taxes next year, but at least you’ll be able to delay your tax obligation.

Cash accounting. Delay giving clients invoices, if they won’t mind a delay. Note: Some clients might prefer to pay bills now so they can claim deductions this year.

Employee bonuses. If you pay bonuses, perhaps your employees will prefer to get the money in 2007 instead of this month.

From the Coach’s Corner, some micro business owners use a technique to alleviate the effects of the onerous estate tax, also commonly called the death tax:

The technique is called gifting. You can give a limit of $12,000 this year per person without paying a gift tax.