Year End Tax Steps!
December 28, 2018
Year End Tax Steps!
Take an inventory of your product. If there is product which is expired, damaged or no longer sell-able for whatever reason, take it out of your inventory and mark your total cost as “spoiled”. This is a deductible expense.
If you have the ability to sell your excess inventory at a slightly discounted rate do so. Holding large amounts of inventory at year end is not a Tax Advantageous strategy.
Speaking of inventory, many companies are trying desperately to get rid of theirs. Now is the time for some smoking deals on computers, tablets, and those big screen monitors you’ve wanted. You will be able to deduct the cost of this business equipment 100% up to one million dollars.
Car expenses, don’t forget that your car is a tax-deductible expense. Keep track of your miles! Business miles are not just to see a customer. Trips to events, the post office and to pick up inventory are deductible! Keep clear records. I use a phone app called Mile IQ which runs silently in the background. You can then classify your drives as business or personal at the end of the day. You will also want to track actual expenses to see whether the mileage or an actual expense deduction is the most Tax Advantageous strategy.
Don’t forget your home office! A portion of your home is deductible. This is an often-overlooked tax strategy.
As many of you may know, the Tax Code received its biggest overhaul in history on November 2, 2017, effective January 1, 2018. While many people will no longer have to itemize due to the larger standard deduction, it is imperative that business owners get the appropriate tax advice to take advantage of a new and largely misunderstood deduction called the Section 199A deduction, also known as a 20% Qualified Business Pass-Through Deduction. Many will be eligible for this potentially huge tax savings.
Feel free to contact me offices if you have any questions.
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Rule Applied to ESAs
One per year rollover rule also applies to ESA's!
New Law to Affect Refunds in 2017
The IRS has announced initial plans for processing tax returns involving the Earned Income Tax Credit and Additional Child Tax Credit during the opening weeks of the 2017 filing season. The IRS is sharing information now to help the tax community prepare for the 2017 season, and plans are being made for a wider communication effort later in the summer and fall to alert taxpayers about the changes that will affect some early filers.
This action is driven by the Protecting Americans from Tax Hikes Act of 2015 that was enacted into law on December 18, 2015. Section 201 of this new law mandates that no credit or refund for an over payment for a taxable year shall be made to a taxpayer before February 15 if the taxpayer claimed the earned income tax credit or additional child tax credit on the return.
Source:The Tax Book Photo:Pexels
If you own or are the beneficiary of an IRA, 401(K) or other retirement plan, review this to avoid an RMD ( required minimum distribution) error. Failure to take at least the RMD amount each year results in a 50% penalty by the IRS !
Photo : https://www.flickr.com/photos/stevendepolo/5437288053 Source: www.irs.gov
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