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NORMAL - For small business owners, leasing equipment isn't always bad and health insurance costs don't have to skyrocket each year.

Knowledge of the federal government's comprehensive, often-confusing tax structure is rewarding, certified financial planner Dave Mills of Morton told a group of Central Illinois business owners at a small business tax-advice seminar Thursday at Illinois State University.

"Tax deductions mean more to you when you're making more money," he said, explaining that businesses should consider yearly income increases when deciding what year to actually record a purchase.

Computer hardware and software, like nearly everything else, depreciates over time. When purchasing new equipment, you could list the entire expense on taxes for one year, or spread the expense over the duration of the equipment's depreciation. The idea is to give businesses more deductions down the road when they hopefully are making more money.

Leasing is another option. Purchasing new computers can create a major cash flow problem. Leasing them spreads the expense over several years without needing to borrow money or break the bank purchasing them.

Plus, "is a computer really an asset? Like a car, the minute you buy it, it's worth half of what you paid for it. And those computers may be obsolete in three years," Mills said.

On health insurance, Mills advocated the use of tax-exempt health savings accounts. Both the employee, who invests money into the account, and the employer save significant tax money, he said.

Employers must also offer a standard health insurance policy, Mills said. Still, one business owner said the tax breaks offset the increases to his benefits policy. The cost for him to provide employee benefits didn't increase this year over last.

Employees, meanwhile, get a money-earning account that follows them from year-to-year and employer-to-employer.

"This is really a recruiting tool for your company," Mills said. And, "employers are often adding (money) to employees' accounts because they're saving so much."

Health plans and leases were only two of many tax topics Mills discussed Thursday.

The McLean County Small Business Development Center, part of a larger federal program, put on the seminar. Opening in March at ISU, the center plans many more free and fee-based workshops in the future, including one specifically for employees laid off last year by Mitsubishi Motors North America, said director Elizabeth Binning.

Seminars are open to anyone - existing businesses, people considering opening a business, students and others.

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