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 Section
125 cafeteria plan.
- Establish a 401(k) or 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.
- Buy equipment through 2009 to take advantage of your 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.
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