Year End Tax Planning

From Lawyers.com

 However, there may still be time to take action to reduce small business tax liabilities. For example, buying necessary equipment for your business by December 31st may allow you to take a big deduction in your 2016 taxes.

Under Section 179, businesses can deduct the full purchase price of qualifying equipment or software purchased during the tax year. This deduction is intended to encourage businesses to buy the necessary equipment to benefit the company. Instead of getting a deduction as equipment depreciates over time, businesses can deduct the full purchase price in 2016 for qualifying equipment purchased before the end of the year.

Qualifying Section 179 purchases include office equipment, computers, computer software, office furniture, and business vehicles with a gross vehicle weight over 6,000 pounds, such as vans, large SUVs, or trucks. There is a limit of $2 million for qualifying deduction purchases. Check with your tax professional to make sure you are eligible.

If your business uses cash-method accounting, you may be able to defer some of your taxable income until next year. By sending payments or charging expenses before the end of the year, you may be able to deduct those expenses this year even if the charge is paid or the check is cashed in the beginning of next year.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s