November 19, 2014 — It is time for year-end tax planning. This should be started in November, not late December. The following are some of the issues that should be discussed with your advisor.
- Deferring or accelerating income
- Deferring or accelerating deductions
- Purchasing assets before year-end
- Selling assets before year-end
- Proper documentation and policies for accruing and deducting bonuses
- Inventory costing methods
- Writing off bad debts
- Maximizing the domestic production deduction
- Loss planning to make sure losses are not limited under the basis, at risk or passive activity rules
- Entity structure for new ventures and 831(b) captive instance planning.
- Other items that may reduce you tax burden.
Each of these categories have several tax planning techniques that can be implemented. One must consider the business and economic impact of them in addition to the tax savings.
Also, have your advisor prepare a tax projection for 2014 and illustrate the impact of the planning techniques.
Get on it as soon as you can.