What Can Business Owners Learn from Football?

What do football and accounting have in common? Plans, plays and strategy, strategy, strategy!

Football season is upon us and as year-end approaches it’s time for business owners, and everyone for that matter, to consider steps to prepare for their 2017 tax returns. Remember that your business tax decisions impact your personal finances and with tax rates continuing to increase it is more important than ever to be proactive and prepare a year-end tax plan.

Did you know?

• Thanks to the Protecting Americans from Tax Hikes (PATH) Act of 2015, some small businesses can now enjoy the benefits from the important  enhancements to expand the Research & Development tax credit.
• Consider purchasing equipment for your business in order to take advantage of the Section 179 deduction. The 2016 deduction limit is $500,000 with a spending cap of $2,000,000, and it can be applied to new and used equipment purchased by year-end.
• Consider contributing to or establishing a 401(k), SEP or SIMPLE IRA. By doing so prior to the filing deadline you can take a deduction in the current year as if paid by December 31st.
• Cash-method businesses that want to defer income should consider delaying invoicing so payment is not received until next year. In addition, pay as many expenses as feasible by year-end to get the deduction in 2017. Credit card charges are considered the same as checks.

Do you need a tax projection? If you answer “yes” or “not sure” to any of the questions below, you should have a 2017 tax projection prepared for you ASAP so that you have time to reduce your tax liability before year-end.

• Do you have large capital gains or losses from the sales of stock or other capital assets?
• Has your income changed significantly from last year?
• Do you anticipate any big changes in income or deductions for 2017?
• Have you considered making a ROTH conversion in 2016?

Davis & Hodgdon Associates CPAs has been assisting Vermonters with tax savings strategies for more than 25 years. Call our office at (802) 878-1963 in Williston, Vermont or (802) 775-7132 in Rutland, Vermont for more information and to schedule a strategy session.