“Year-End Tax Tips for Business Owners”

1. Business owners may be able to deduct up to 20 percent of their qualified business income from their taxable income through the Qualified Business Income Deduction (QBI).

2. Taking advantage of bonus depreciation or Section 179 expensing for capital expenditures before the end of the year can lead to significant tax deductions for business owners.

3. Reviewing all business holdings to see if they can be aggregated for the purpose of computing a QBI deduction may result in a greater deduction for business owners. 1. Tax loss harvesting involves selling investments that have experienced a loss to offset gains in a portfolio.
2. Investing in a Qualified Opportunity Fund (QOF) can provide temporary gain deferral and tax-free appreciation if held for at least 10 years.
3. Establishing or contributing to a donor-advised fund (DAF) allows individuals to make charitable contributions and receive immediate tax benefits while maintaining flexibility in distributing funds over time. 1. Annual gifts can help reduce an individual’s taxable estate and should be taken advantage of.

2. It is important to consider advanced estate and gift tax planning strategies such as family limited partnerships, grantor-retained annuity trusts, and generation-skipping transfer trusts for those with significant wealth.

3. High-net-worth individuals should consider front-loading 529 plans or paying tuition and medical expenses for loved ones as a way to reduce their taxable estate.

4. The large estate exemption set to expire at the end of 2025, so those with a taxable estate should start thinking about how to use the higher exemption before it goes away.

5. Year-end tax planning for high-net-worth business owners involves making strategic decisions to optimize income, deductions, and wealth transfer, and it is important to work closely with experienced tax professionals and financial advisors.

https://www.ghjadvisors.com/ghj-insights/5-game-changing-year-end-tax-tips-for-business-owners