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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 whether your current form of business is still best for you.
  • Set up a nonqualified retirement plan for your highest paid employees.
  • 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 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.
  • 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.