Business Tax Planning

Business Tax Planning

Tax season is approaching, which means for business owners that tax planning is taking place. Continue reading or view the 2019 business tax planning video for tips.  
 
Depreciation:
For business owners who own equipment and heavy-duty vehicles please keep in mind that up to $1,020,000 of qualified fixed asset additions can be expensed in 2020 under Section 179, including equipment, furniture, roofs, HVAC equipment, and security systems. Also, the first $18,000 of vehicles with a towing capacity of 6,000 pounds or less and the first $25,000 of vehicles with a towing capacity exceeding 6,000 pounds are eligible to be expensed under Section 179.
Also, bonus depreciation of up to 100% will be allowed on equipment, furniture, and software placed in service during 2020. In addition, up to $18,000 of bonus depreciation is allowed on new passenger vehicles purchased in 2020. Careful tax planning can help you maximize your depreciation deductions in 2020.  Contact your ATA tax professional to assist you in maximizing this tax benefit.
Section 199A Deduction:
Owners of partnerships, LLCs, S-Corporations, and sole proprietorships could be eligible for a deduction of up to 20% of qualified business income.  It reduces taxable income whether or not you itemize deductions. Anyone with taxable income of $321,400 or less ($160,700 if single) is entitled to the full 20% deduction, and those with taxable income of up to $421,400 ($210,700 if single) are entitled to the deduction, subject to limitations.  Contact your ATA tax professional to see if your business is eligible for this tax benefit.
Employee Benefits:
In this economy, attracting and retaining your best employees is essential to your business. One way to accomplish this goal is through offering them a variety of tax-friendly benefits.  If you provide your employees with a qualified high-deductible health plan (HDHP), consider offering them Health Savings Accounts or Flexible Spending Accounts. If you have employees that incur daycare expenses, consider offering Flexible Spending Accounts for child and dependent care expenses.  Contact your ATA tax professional if you would like to discuss implementing these benefits in your company.