What’s the price environment looking like for you within your industry right now?
Need help examining where the dollars are going out and coming in? Schedule a time with us: 218-623-6050. And, while we’re at it, we can also talk about how to continue 2023 strong.
The TCG Accounting Team’s
“Real World” Business Strategy Note
Mid-Year Tax Moves
“Time is money.” – Ben Franklin
It’s yet another … interesting, to say the least, year to run a small business. We’re here here today to let you know that it’s really not too early to improve your tax situation ahead of next year’s tax season.
Even now, you can make (or change) moves that you’ll thank us and yourself for when you file this year’s taxes for your company in 2023.
Six Moves You Can Make This Year
1.) Examine Prices. We know customers frequently say how expensive everything is, but things are expensive for you, the business owner, too! Do your prices reflect what you’re paying? How do they fare when compared to your competitors? Don’t go wild, here – you don’t want to overcorrect and drive your business away. But you need to make sure your prices are helping you keep a sustainable business at the same time.
2.) Examine deductions. We urge you, and we’re happy to help, to review all your business activities for potential deductions, well ahead of 2024. Use a fine-toothed comb and pay attention to detail. Mention your deductions to us — we make no guarantee, but you don’t want to leave any legitimate business deduction on the table.
The same goes for tax credits like for research and development or, specific to some industries, energy credits or FICA tip credits. If you have real estate, start looking into cost segregation or, down the road, a like-kind 1031 exchange. It might be tough to pull the needed documents together in the days left this year, but at least we can start thinking about these questions.
3.) Equipment and Sec. 179. Buying equipment or machinery and putting it in service before the end of the year can get you a deduction under Sec. 179. This can potentially be a big deduction, too, but this isn’t always automatic and there can be conditions, so check with us.
4.) Tax-smart use of credit cards. Deductions can be taken as of the day of the purchase for credit cards used by a single-member LLC, by a sole proprietor who files a Schedule C and by a corporation that uses a card that is in the corporate name.
If your business is a corporation and you are the personal owner of the credit card, the corporation has to reimburse you, and for tax purposes, the deduction takes effect on the date of the reimbursement.
5.) Retirement and medical plans. Have you established your company’s retirement plan? If not, do so. One of your quickest options might be a Simplified Employee Pension plan. You can deduct the lesser of your contributions, or a quarter of the employee’s compensation.
Regarding your company’s medical plan, make sure you have health insurance reimbursements recorded properly for tax deductions or credits.
6.) Qualified Improvement Property. A QIP, if you have one, is a property eligible for special tax consideration. But to secure the QIP deduction in 2023, you need to place the property in service by the end of this year – which we’re almost halfway through!
It’s never too early to get the most out of your business taxes.
Let us help you,
The TCG Accounting Team
