Top 4 Tax Planning Strategies For Small Business

Top 4 Tax Planning Strategies For Small Business

Introduction Entrepreneurship is a one man show.

The business owner is responsible for all the different things related to the business. Starting from handling the employees, accounts to every single matter. However, often the taxation becomes an issue for the owner because of not having enough knowledge regarding it. In case of not hiring a professional tax preparer, the business owner needs to know the basics of taxes. The current presentation is all about the tax burden issues and tax planning strategies.

100% Bonus Depreciation For Asset Additions The newly included Tax Cuts and Jobs Act, One can avail 100% first-year bonus depreciation for the new and used properties. It means that the entire cost of some properties you added will be right off completely. Therefore, you can consider new property acquisition until the year-end.

It is better to contact a tax preparer who can guide you about the 100% bonus depreciation breaks. Further, you will be able to know about the types of properties that qualify under this.

Claim 100% Bonus Depreciation For Heavy SUV, Pickup or Van Heavy vehicles used for business over 50% come under the first year depreciation deduction. It is the reason behind using heavy vehicles like SUVs, pickups and vans for business transportation as these qualify for the 100% depreciation. To claim the 100% bonus depreciation, the transport’ gross vehicle weight rating (GVWR) must be higher than 6000pounds. Be sure about it by looking at the GVWR level of the vehicle. Therefore, if you are planning to buy a vehicle, it is better to hire it soon to be eligible for claiming the depreciation.

179 Deduction Rules TCJA raised the section 179deduction up to $1million. It included the property for lodging, qualifying the actual properties etc. TCJA allows the section 179 deduction for the use of the personal properties to furnish or lodging purpose. Therefore, now one can claim a deduction of personal properties for commercial lodging.

Further, one can claim the deduction for the improvement of the properties used for the business just after the service.

Defer The Taxable Income Cash method is used for tax purposes in most small businesses. Cash method accounting allows a small business to minimize taxable income. One can charge the recurring expenses that are generally pain in the next financial year.

Further, the payments can be done by cheques just before a few days of year ending. However, because of the registered mail, you can surely claim the tax deduction for the payments. Applying these means altogether can save your good amount of tax.

Thank You

Visit: https://jarrarcpa.com/tax-planning/