Business Tax Strategies
To the extent possible, shift income into next year and accelerate deductions.
- Determine how state and local taxes, as well as year-end strategies, may affect your overall plan.
- Consider a compensation and fringe benefit study to see what makes for your business from a tax perspective. For example, "split the difference" on compensation increases by providing benefits that are deductible by the company and tax-free to the employee.
- Avoid payroll taxes by shifting a portion of compensation from salary to fringe benefits. Unreimbursed medical expenses and payroll-deducted group insurance are ideal benefits to include in a
Flexible Spending Account.
- Establish a
SIMPLE program to help attract and retain quality employees.
- Time purchases of personal property to maximize depreciation deduction and avoid the
mid-quarter convention .
- Conduct a
cost segregation study to identify and price separately the nonstructural items and land improvements from your building to accelerate depreciation.
- Switch to an "accountable" plan if you're currently reimbursing
employee business expenses under a "nonaccountable" plan.
Buy business supplies at the end of a profitable year and accelerate other expenditures like repairs and maintenance.
Review entertainment, club dues, and meal expense accounts to make sure they are correctly classified.
- Review the
status of workers as employees or independent contractors.
Donate excess inventory to qualified charities to receive larger deductions.
Employ your children if you own your own business to take advantage of several tax benefits.
Take advantage of the increased
Section 179 expense deduction.
- Review the amount of your estimated tax payments.
- Determine whether you'll be subject to the
AMT this year or in the future.