Do you know how much tax you will owe by the end of the year? Our clients do and you should too. Regardless, here are some tips that can potentially reduce your tax liability. Call or email if you would like help with tax planning and to get a projected tax cost for 2015.
- Prepay expenses before Dec. 31, 2015.
- Stop billing customers and patients.
- Start buying office and other equipment. Section 179 is currently $25,000 but lawmakers may soon reinstate the $500,000 expensing limit and bonus depreciation. Last year the depreciation rules changed on December 14, 2014.
- Start using credit cards to buy supplies, equipment etc. as that is like cash. Equipment needs to be put in service before they are deductible.
- Establish a retirement plan. Although you might not be able to establish Defined Benefit Plans and/or Cash Balance Plans because of the time left in the year it is worth a try. You can of course set up a Defined Contribution Plan. If not, a Keogh plan can be established after the end of the year and still be deducted in 2015.
- Start to get compliant by working to get a payment plan to the IRS established and start to get all returns filed as you could lose your passport.
- The Tax Extenders Bill for 2015 is supposed to be approved by soon and should be similar to the 2014 bill (seen here). There will be major tax planning implications because of this. Read more about it here.