Year-End Tax Planning for Business

As year end approaches, we’re doing more and more tax planning for our clients. We’re often asked what they can do within their business to reduce the tax burden for this year. Below are a few points to consider as we enter the final months of the year.

  • If you’re an accrual basis taxpayer (we can tell you if you don’t know), most employee bonuses based on 2011, but paid in the first two and a half months of 2012, can be deducted in 2011. They will be picked up by the employee when paid 2012.
  • In addition, if you’re an accrual basis taxpayer, be sure that any customer deposits or down payments for products or services delivered after 12/31/11 are not included in income.
  • Seek to maximize depreciation deductions by puchasing necessary equipment in 2011, as many of the accelerated depreciation allowances are set to expire at the end of this year unless Congress renews them.

We have many more great ideas for tax savings, which can be a great gift to yourself as we approach the holiday season.