2018 Q4: Preparing for the End of the Tax Year
Though it doesn't seem like a lot has changed in how to work on your business, it's important to quickly take action if you're going to be prepared for the end of the tax year. All the changes that have happened means a big difference in your overall tax liability.
Here's a quick look at some tips to help prepare for the end of your tax year for the best possible outcomes.
Should you restructure? C corporations are now allowed to use a flat tax rate of 21% versus prior years' sliding scale that could go as high as 35%. It may be worth considering the expense and trouble if it allows you to save that 14% difference compared to past years.
It's time to invest in assets. Whether you need new equipment due to an expansion or to replace aging machinery, it's a great time to invest, as you can now write off the cost of property up to $1 million instead of having to wait to recoup its value through depreciation.
Have you been stuck in accrual accounting? You may be able to change to easier-to-manage cash accounting. 2017 marked the expansion of cash accounting to businesses with up to $25 million in annual receipts, as averaged over three years.
Keep an eye on new business interest expense limits. The new tax laws have made some serious changes to how much interest you can deduct, but there are ways around these limitations for many businesses.
Can you provide equity grants? This is one option for employee compensation that many businesses have avoided due to complexity in the past, but the new tax laws make the process much easier for your business.
By keeping these tips in mind, you'll be able to take advantage of the best opportunities available from the new tax laws and grow your business. But what if you're not quite sure what you can do and what kind of tax strategy you can put into effect? AccountRely has financial experts who can help you form a solid tax strategy that is in line with the new tax laws and your business goals. Please feel free to reach out today to get started.