While many of our readers are preparing for office Halloween parties, it may be easy to lose sight of the fact that the end of the year will be coming soon. Indeed, 2018 may still be two months away, but with all the celebrations and time off that comes with the holiday season, the New Year will come sooner than you think.
With that, there are a number of end-of-year tax planning tips that you should be aware of. This post will highlight a few.
Be sure to deduct new equipment expenses – Remember, businesses can deduct up to half of the value of new equipment put into service during the year. So whether you purchased new computer equipment, vehicles or mobile technology, these expenses can help in reducing your taxable income.
Document business activities – If you are not considered a passive investor in your business, you can avoid paying a 3.8 percent Medicare tax on your income. Depending on your role, you may have to document your activities.
Begin gathering documentation – Your mandatory reporting will also come sooner than you think in 2016. Also, next year the penalties for failing to produce such reporting will increase. In some cases the penalties could double. As such, gathering documentation to support your reporting sooner rather than later is critical.
Make charitable contributions properly – The holiday season is also known as the season for giving. If you intend to do so, make sure that you are contributing to an eligible charity, and make sure that you have the documentation to support the details of the contribution.
The preceding is not legal advice. If you have questions about tax deductions specific to your business, an experienced tax attorney can advise you.