As changes to the American Taxpayer Relief Act and the Affordable Care Act of 2012 become effective, business owners are facing escalating tax rates. Insightful enterprises are employing wealth management strategies to counteract the cost. Continual planning is essential for finding opportunities that will reduce the financial burden. Several options exist to help corporations retain wealth and reduce taxes legally.
A recent article on the Insurance West website, titled “Important Tax-Planning Tips for Business Owners in 2014,” states that retirement packages can decrease tax liabilities by deferring income. At the end of the business year, companies will be examining data to see if there are any tax savings available on defined contribution, benefit, cash balance, and 401(k) plans.
The original article notes that gathering this data will allow business owners to make informed decisions about potentially accelerating deductions and deferring income into the next quarter. Compiling financial projections and reports is extremely important for proper tax planning.
The original article also reminds us that integrating personal tax planning into the company tax planning allows state income, real estate, and mortgage taxes to offset business revenue. Your business planning and estate planning attorney will be able to suggest solutions such as legitimate tax shifting by employing children, who can start a Roth IRA, along with the tax benefits of continuing education.
There have also been two pieces of tax extender legislation passed by the Senate and the House that would extend provisions for businesses—bonus depreciation, generous donations for S corporations, smooth transitioning from C to S companies, and a $25,000 reduction on Section 179 expenses.
Next year the Affordable Care Act's employer mandate will go into effect for companies with more than 49 full-time employees. Appropriate health insurance for employees must be documented for compliance, and with this, companies are looking into various tax options.
According to the original article, you need to integrate your estate planning into your corporate structure to reduce the size of your estate, and business owners may also consider giving shares to family members who are in a lower tax bracket.
Reference: Insurance West (November 8, 2014) “Important Tax-Planning Tips for Business Owners In 2014”
An attorney experienced in business and estate planning can help you make the right strategic moves as the year comes to a close. Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.