income tax planning

Income Tax Planning, There’s Still Time

It definitely is that time of year.  No, not the holidays, although that is much more enjoyable than the topic we are addressing here.  It’s the end of the year.  Time to wrap up final costs and revenues and figure out just how much money you will be giving to old Uncle Sam.

No matter how successful your year has been, there is still more you can do to improve your financial situation.  In the spirit of the season, we would like to offer some tips and reminders as well as some warnings to those who occupy the small to huge business arena we call commerce.  So, without further adieu, here are a few things to think about as you plan for your end of year accounting.

Section 179 Expenses

Capital expenditures can be a great way to shelter excess profits.  If you are planning any major capital expenditures, it makes good fiduciary sense to try to complete those plans before the end of the year.  Taking advantage of the 2016 Section 179 Expense election makes good sense, especially if you have excess profits.

In reality, if major capital expenditures are in your future you would be crazy not to pull the trigger on those purchases and reduce your overall tax liability.  Here are a few things to keep in mind when considering your Section 179 capital expenses.

2016 Deduction Limits – The Sect. 179 deduction can be used for all new and used equipment, as well as off the shelf software.  The dollar limit for 2016 is $500,000 but the clock is ticking.  This limit is only good for 2016 and only on equipment financed/purchased and put into service by the end of the day December 31, 2016.  After that time, all bets are off.

There is also a spending cap limit on Equipment Purchases of $2,000,000 so I guess that corporate jet might be out of the running.  What this spending cap means is that this maximum amount is the ceiling before the Sect 179 deduction begins to be reduced on a dollar for dollar basis.  So you can still purchase that corporate jet, but the excess over $2,000,000 will be at a reduced rate, depending on the amount.  However, This spending cap is high enough to make this deduction a real tax incentive for most small businesses.  It’s like free money so you should consider utilizing it.  Here is a practical example, courtesy of Crest Capital.

Income Tax Planning

If you need last minute tax counseling we are here for you.  Call today to make an appointment with our CPAs.  It will be the best investment you can make for your company.  To find out more about the Section 179 Expense rules you can check out the IRS Website,


Corporate and Partnerships Filing Deadlines

It’s important to note new changes to the 2016 corporate and partnership tax filings. Under the current filing rules, most calendar year partnership tax returns are due on the same day as individual income tax returns: April 15.  The Highway Act accelerates the due date to March 15 for filing partnership tax returns and issuing Schedules K-1 to partners (the same due date as S corporations).  Partnerships and limited liability companies need to plan for the filing deadline change by determining how the business will file returns and issue Schedules K-1 to partners 30 days sooner than the current schedule.

There are a lot more changes that will impact your tax and financial situation.  We can help navigate you through the complex and often confusing world of income tax filings.  We are available anytime to help make sense of the confusion.  Advanced Tax Solutions, concerned about saving you money.

Author – Robert Jacob


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