2018 Year End Business Tax Planning

Published by Heather on

2018 Year End Income Tax Planning for your Business

Year end tax planning for the 2018 tax year may be more complex and challenging than in prior years.  The most immediate advice we can provide is…. plan and be prepared.

Below we have compiled a list of items that may help save or defer tax if taken into account before the end of 2018.

  • Consider acquisition of capital equipment that may qualify for 100% first year bonus depreciation and/or Section 179 first year expensing elections.
  • Passthrough entities (S corporation or partnership) and sole proprietors: you may qualify for a 20% deduction of your business income. But proceed with caution: many limits and exclusions apply.
  • Maximize your contributions to retirement plans and consider year end accruals for any contributions deductible in 2018 but payable in 2019.
  • If you anticipate a tax loss for 2018, consider new limitations on the deductibility of net operating losses and “excess business losses” in future years.
  • Review your basis in passthrough entity businesses to assess your ability to deduct any current year losses.
  • You may have an opportunity to adopt a more favorable method of accounting for income tax purposes that was previously not available to you (i.e. cash basis).
  • Determine any deductible accrued bonuses at year end, but payable in 2019.
  • Determine if there is any opportunity to accelerate or defer income and/or deductions between 2018 and 2019.

Please visit our website for additional details of the above noted items in addition to other potential year end planning opportunities. You should examine any tax planning options thoroughly before initiating action. We are happy to discuss these with you and tailor a tax plan that will work best for you.