Time to Schedule Your Tax Planning Session
Effective tax planning helps businesses achieve their financial goals and plan for their upcoming needs. In fact, it should lower taxable income, reduce tax rates, provide for greater control of when taxes get paid, and maximize deductions and credits whenever possible
Now is the time to schedule a tax planning appointment. It can make a difference. This is especially true this year because:
1. Recent New Tax Laws:
- Recent legislation, such as the Tax Cuts and Jobs Act (TCJA), Families First Coronavirus Response Act (FFCR Act), Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Setting Every Community Up for Retirement Enhancement Act (SECURE Act), the American Rescue Plan Act (ARP Act) are designed to help taxpayers increase cash flow and can make a big difference. It is important to make sure that you are taking advantage of what the laws provide.
- Expected legislation: A version of The Invest in America Act is expected to pass at some point. It is important that you look at how this legislation could affect you.
2. Have you taken advantage of Business Tax Credits? You may be eligible for tax credits, such as:
- Research and Development Tax Credit
- Employee Retention Tax Credit
- Retirement Plan Startup Costs Tax Credit
- Work Opportunity Tax Credit
3. Review Cash Basis Receipts and Spending:
- Determine if income should be deferred and what expenses should be paid before end of year.
- Maximize owner profit sharing contributions and determine owner compensation
- Consider effectiveness of year-end expenditures and passive business activities.
4. Review Purchases and take advantage of business property expensing/depreciation options
5. Year-End Action Items
- Balance sheet reconciliations. Reconcile each asset and liability account every quarter. A well-supported balance sheet can guide decisions about cash reserves, debt financing, inventory management, receivables, payables, and property. Regular monitoring can highlight vulnerabilities, providing time for corrective action.
- Year-End Inventory
- Review Basis for Loss Limitations
6. Retirement and Employee Benefit Programs:
- Is it time to set up a plan or make changes to your plans?
- Determine funding needs and timing for tax and cash flow advantages
7. Review your Business Entity:
- Determine if Structural changes are needed or if additional entities are appropriate
- Optimize 199A deductions
- Review your corporate formalities
- Ensure Insurance Policies are up to date
The tax lawyers and other financial professionals at Moskowitz, LLP offer comprehensive assistance to businesses large and small, including year-end business tax planning services. Moskowitz LLP works with businesses of all sizes. To learn more about Moskowitz, LLP and how we can help you legally save on taxes, visit our website.