Here’s your business slogan for December: Buy-Give-Start. As the year winds down, those three words summarize tax-planning actions you can take to save money on your 2014 business taxes.
- Buy. Equipment you purchase and place in service before December 31 is eligible for a deduction called Section 179 expensing. Section 179 lets you write off the full cost of qualifying assets in the year of purchase, even if your in-service date is December 31.
For 2014, you can expense up to $500,000 of assets you buy during the year.
- Give. Make contributions to qualified charities. The rules are generally the same as for individuals, though exceptions exist, such as a special deduction for inventory you donate from your “C” corporation.
Contributions may be deductible on your personal tax return, depending on the form of your business.
- Start. Establish a retirement plan. Tax benefits include deductible contributions, tax-deferred growth, and the potential for a federal income tax credit to offset start-up costs.
Examples of plans you can set up by year-end include a solo or group 401(k), a simplified employee pension plan (known as a SEP), or a profit sharing plan.
Give us a call for more year-end tax saving suggestions.