– Section 179 of the IRS tax code allows business owners to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year from gross income.
– Business owners can defer income by sending out invoices a few days later in December or accelerate deductions by prepaying bills due in January.
– Meeting with a financial advisor and tax professional is recommended for year-end tax planning. – Consider redesigning the company retirement plan to accommodate changes in employee demographics, business income, or highly compensated employees. Options could include SIMPLE IRAs, profit-sharing, and Safe Harbor 401(k)s.
– Take advantage of net operating losses to lower income and reduce tax bills in other years, as allowed by the Tax Cuts and Jobs Act of 2017 and the 2020 CARES Act. Consult a tax professional for guidance.
– Don’t forget to deduct vehicle expenses when using your vehicle for business purposes, either through standard mileage reimbursement or actual expenses. Keep an accurate mileage log and receipts.
– There are many other potential business deductions, so consulting with a tax professional can help uncover additional benefits. It’s important to plan ahead to realize any entitled benefits.
https://www.raymondjames.com/commentary-and-insights/business-ownership/2023/12/21/a-business-owners-guide-to-year-end-tax-planning
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