Top 10 Year-end Tax Moves for Business Owners & Accredited Investors

With only a few weeks left in 2014, there is still time to cut your tax bill.  We’ll review the more traditional strategies along with a few hidden gems specifically for business owners and accredited investors that often get over looked.

The basic strategy for year-end planning is to time your recognition of income so that it will be taxed at a lower rate, and to time your deductible expenses so that they may be claimed in tax years when you are in a higher tax bracket.  In a nutshell, you should try to do the following:

  • Recognize income when your tax bracket is lower
  • Pay deductible expenses when your tax bracket is higher
  • Postpone the payment of tax whenever possible


10      Use appreciated stock rather than cash when contributing to charities.  This may help you avoid income tax on the built-in gain in the stock, while at the same time maximizing your charitable deduction.

       Use a credit card to make contributions in order to ensure that they can be deducted in the current year.  Obviously, don’t go into debt to make the contribution.

8        Pay last-quarter taxes before December 31st rather than waiting until January 15th.

7        Direct charitable contributions into a pooled income fund or donor advised fund to control the timing and charitable beneficiaries without the expense or administrative headaches of a foundation or charitable remainder trust.

       Business owners, accelerate expenses (such as repair work and the purchase of supplies and equipment) in the current year to lower your tax bill.

5        Make your early January mortgage payment (i.e., payment due no later than January 15 of next year) in December so that you can deduct the accrued interest for the current year that is paid in the current year.

       Business owners, in certain circumstances, you may be able for a full cost deduction of last-minute purchases of equipment by taking advantage of Section 179 deductions.

3        Accredited investors, consider taking advantage of the tax deduction associated with investing in a project that offers has intangible drilling costs or IDCs.

2        If you have significant business losses this year, it may be possible for you to apply them to the prior year’s returns to receive a net operating loss carryback refund. If you had significant income in prior years, you should maximize the current year’s losses by deferring income if possible.

1        Set-up a tax deductible Solo 401(k) if you’re self-employed and max fund it before year-end for $17,500 plus $5,500 if you’re 50 and over.  Make additional employer contributions by your tax filing deadline up to $52,000.

If you’re interested in the more tax tips, drop us a line and we’ll send the rest of the ideas.



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