Friday, October 9, 2015

7 End of Year Tax Planning Tips for Small Business Owners

Cathy A. Robinson
Senior Manager

We are now in the fourth quarter of 2015, and it’s time to think about tax planning.


However, Congress hasn’t passed the tax extenders, which are a part of our tax planning and strategies.  Several expired extenders include:  50% bonus depreciation, increase in expensing to $500,000 of Section 179 property, work opportunity credit, and research and experimentation credit.  

In the meantime, small businesses owners should still begin preparing for the end of the year. Tax strategies small business owners should consider include below:

·         If you buy a heavy SUV, pickup, or van for your business, you have the ability to write off up to $25,000 of the cost of a new or used heavy SUV that is placed in service before the end of your business tax year that began in 2015.

·         Determine if you can take advantage of the “de minimis safe harbor election”.

·         Juggle income and deductible expenditures through year-end if you are in a higher tax bracket this year.

·         If you’re eligible, utilize the cash method accounting. It gives you the flexibility to manage 2015 and 2016 income to minimize taxes over the two-year period.

·         Have a cost segregation study prepared.

·         Implement a cash balance pension plan.

·         Set up an IC-DISC, if you qualify.

Stay tuned as more develops in regards to business extenders.   As tax professionals,  we would like to know if these tax planning strategies will be extended early enough to make an impact in developing a tax plan for our clients.  However, review where your business income is now and begin your roadmap to implementation of your tax strategies.  If you have questions concerning tax planning for your business, contact your accounting professional.