2021 Year End Income Tax Planning for Your Business

Published by Heather on

2021 Year-End Income Tax Planning for Your Business

As we approach the end of another year, it is important to take some time to think of planning moves that may help lower your income tax costs this year.

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

  • Accelerate or defer income or deductions into a tax year where taxable income may be lower and/or more beneficial.
  • Consider accelerating depreciation deductions for planned capital investments in the coming year.
  • Maximize your contributions to retirement plans and consider year-end accruals for any contributions deductible in 2021 but payable next year.
  • Consider the opportunity to apply current or previously suspended passive, basis, or net operating losses to offset current year income.
  • Review your basis in pass-through entity businesses to assess your ability to deduct current year losses.
  • Assess income from pass-through entities (S corporation or partnership), sole proprietors, and some rental properties that may qualify for a 20% deduction of your business
  • Consider eligibility for employment and/or income tax credits resulting from paid family or medical leave, hiring of disadvantaged workers, or other employee retention programs.

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