End of the Year Tax Planning

November 5, 2018
10 tax-savvy business moves to make before 2019

Even though 2019 is just around the corner, you still have time to take action and save on your business tax bill. Here are 10 ideas to consider:

  1. Buy equipment. Generally, you can claim an immediate Section 179 deduction (plus bonus depreciation for any remaining cost) for qualified property placed in service within generous limits in 2018 — no matter how late in the year this occurs.
  2. Stock up on supplies. If you pay for incidental office supplies before year-end, the full cost is deductible in 2018, even if you don’t use all the supplies this year.
  3. Throw a holiday party. Despite recent tax law changes, your business can still deduct 100 percent of the cost of a holiday party for your entire team.
  4. Fix up the premises. Under recent regulations, you can deduct the cost of minor repairs, but capital improvements must be written off over time.
  5. Dole out bonuses. Bonuses paid to your employees before 2019 are deductible in 2018, but are also taxable to the employees this year.
  6. Move up business trips. If you accelerate a long-distance business trip planned for next year, you can increase your 2018 travel expense deduction, including write-offs for reasonable lodging costs and round-trip airfare.
  7. Try to collect debts. By making genuine collection efforts, you can secure a deduction in 2018 for bad debts that have become worthless.
  8. Switch inventory accounting. If prices in your industry are escalating, you might switch from the “First in, First Out” (FIFO) method to “Last In, First Out” (LIFO) to reduce your taxable gain.
  9. Send employees to school. Your business can deduct education provided to employees under a qualified plan. Up to $5,250 of benefits are tax-free to employees.
  10. Get a head start. Finally, if you’re getting a business off the ground, you may take a deduction of up to $5,000 of qualified startup costs.

Call if you have questions about your year-end business tax plan.

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