October 19, 2016
Typically, it’s better to defer tax. One way is through controlling when your business recognizes income and incurs deductible expenses. Here are two timing strategies that can help businesses do this:
But if you think you’ll be in a higher tax bracket next year (or you expect tax rates to go up), consider taking the opposite approach instead — accelerating income and deferring deductible expenses. This will increase your tax bill this year but can save you tax over the two-year period.
These are only some of the nuances to consider. Please contact us to discuss what timing strategies will work to your tax advantage, based on your specific situation.
It’s been said that timing is everything. With the reduction of individual income tax rates under the Tax Cuts and Jobs Act, now may be the right time to convert a traditional IRA to a Roth IRA.
The Section 179 deduction has long provided a tax windfall to businesses, enabling them to claim immediate deductions for qualified assets, instead of depreciating them over time. For 2019, the maximum deduction is $1.02 million, subject to a phaseout rule if more than $2.55 million of eligible property is placed in service during the tax year. Even better, the Sec. 179 deduction isn’t the only avenue for immediate tax write-offs for assets such as machinery and equipment. Under the 100% bonus depreciation tax break, the entire cost of eligible assets placed in service in 2019 can be written off this year. Contact us to learn how your business can maximize the deductions.
Business owners have been engaging in bartering transactions for hundreds of years. But if your company trades goods or services today, be aware there are tax consequences.