5908338As a business owner your ultimate goal is to be profitable year-in and year-out. Part of ongoing operational strategy is to reduce, minimize and even eliminate tax burden through planning and strategic tactics. Even though you work through the year guided by expert advice, there’s still time to make a review of your tax picture before 2015 ends.

Doing so now can help you see where you currently stand, and possibly still identify overlooked tax-savings opportunities. Here are some suggestions for lowering taxes on business income as we finish out the year.

Timing year-end transactions and income can have a major impact on tax liability. Look for ways to defer income so that it is recognized in 2016. For a business this can mean delaying business notices, opting for a cash-method basis. In addition, delaying delivery of services and shipments of products made late in the year until 2016 can shift some of the income as well.

On the flip-side, accelerating deductible expenses in 2015 that may be planned for early in 2016 can reduce income overall. Take steps like purchase equipment and supplies that you would use in 2016 anyway, and consider boosting your timeline on needed repairs or other required work. Year-end employee bonuses are also a good way to increase expenses, if this is something you had planned for first quarter 2016 anyway.

If your company is a capital-intensive business, deductions for depreciation can have a huge impact. At this time, it is good to take a look at year-to-date fixed asset purchases to estimate the potential for deductions. The timing of purchases on these items in 2015 will impact the amount of depreciation deduction allowable.

There are also expenses to consider buying before year-end that can be totally deducted in 2015 based on if they qualify of the Section 179 election. The current limit on this election is $25,000, which is much lower than in past years, but is still a key way to save tax liability. There are also small expense situations that a company can take advantage of – be sure to maximize use of these.

Despite the goal to make a profit, sometimes there are situations in which a business incurs losses through things like bad debt, theft, disasters, capital losses and more. There are strategies specific to these types of circumstances that can help boost a company’s situation.

Beyond what I have covered, there are many other strategies to use, based on your operations and type of business you run. The key point is to review your current tax situation with some guidance from those in the know and maximize opportunities that are available.

Each taxpayer’s situation is unique and the above has been provided to you simply to trigger some ideas for you to consider as you approach the end of the year. Prior to taking advantage of any tax saving steps, you should consult with your tax advisor.

0 No comments

Comments are closed.