With uncertain times, it’s never too early to start planning your taxes
With uncertain times in Washington and wrangling over the president tax proposal, it’s still never too early to start planning for taxes. In fact, this year it may take even more planning because of the need for modeling on several different alternatives.
Summer is the perfect time to start tax planning. We’re halfway through 2017, so you’ll have six months to review your financials. The last thing you want in business is an unpleasant surprise. Being proactive can help you maximize your tax outcome next April.
Here are three items to consider in your tax planning:
- Keeping an eye on Congress. Consider “what if” situations and model them to see what consequences they may have for your firm. The current Administration has proposed tax cuts for corporations and pass-through entities. These proposals may or may not come into effect, but if they do, it’s best to be ready.
- Accelerating and maximizing deductions. Firms should take advantage of the opportunity under Sec. 179 to deduct expenses for purchases of tangible property.
2017 Deduction Limit = $500,000
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for the 2017 tax year, the equipment must be financed or purchased and put into service between January 1, 2017 and the end of the day on December 31, 2017.
- Deferring income to 2018. Cash- basis taxpayers that want to defer income may consider accelerating cash payments to vendors or delaying cash receipts to customers so cash isn’t booked until 2018. It is important to remember, however, that these methods only defer income (and taxes due) by one year. Therefore, a solid strategy or sound guidance is necessary when using these methods in order to ensure true tax savings is achieved where possible.
At CFO Strategic Partners, we’ll provide strategic financial vision and expertise to help your company reach its goals. With the power of many, we can help prepare you to file your taxes. Schedule a complimentary consultation today to see how we can help your company succeed.