Welcome,

This week we will review some basic planning that should be initiated now to help reduce your tax burden for the end of the year.  Sincerely,

Paul Hernandez-Cuebas
Editor

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September 13, 2005
Volume 1 Issue 27        

PLANNING FOR YEAR END TAXES STARTS NOW...

  1. Focus on Section 179 savings.  You can deduct over $100,000 in qualified assets as a current year expense.  Not all assets are qualified, so be sure to ask your accountant what is qualified. Computers and some software are deductibles.  Now is a great time to bring that new system in house.  Remember you must be in the black to take section 179 deductions.
 
  1. Review assets and inventory.  Even fully depreciated assets that remain on the books can affect your liability.  Also, reduce your inventories as much as possible to reduce income and property tax liabilities.
 
  1. Capitalize on NOLS (Net Operating Losses).  Previous years losses can be carried forward to reduce current year income.  Also NOLS can roll forward for 20 years.  Sub-Chapter S Corps should really pay attention to NOLS since you are taxed at your personal bracket level.
 
  1. Create a retirement plan.  Both 401K and simple retirement plans present an excellent opportunity to reward employees and shelter income from taxes.  Distribution for profit sharing payouts do not have to be distributed until the extended tax return date of September 15, 2006. This means you can take the deduction from your Corporate taxes and have up to nine months to get your cash flow together.  It makes a lot more sense to distribute profits to employees and yourself than give it to the government in taxes.  This is a very confusing area so a good retirement benefits planner or accountant with those skills can save you a lot of taxes and create an environment where employees participate more fully in the success of their company.

 

PLAN, PLAN, PLAN, now is the time to get the jump on your taxes.  Look over your business with your tax advisor to maximize all your tax advantages.

 

Editors Note:  It is important that your tax professional review these ideas with you to make sure you qualify for any of the ideas referred to in this newsletter.

 

 

 

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