Tax Cutting Time

There’s not much time left to take steps to cut 2014 taxes for your business. Here are a few last-minute possibilities for you to consider :

1.       Set up a retirement plan. It’s not too late to create a retirement plan for yourself and your employees if you have them. The plans can be simple to set up and administer, such as a Simplified Employee Pension (SEP) plan. With a SEP, you can wait until the due date of your tax return, including

extensions, to make the actual contribution and still claim a deduction in 2014.

2.       Buy needed equipment before year-end. To benefit from Section 179 expensing for 2014, assets you purchase must actually be placed in service by year-end.   

3.       Review your business inventory. Remove obsolete, unsalable, or damaged items to reduce your year-end inventory balance.

4.       Check your S corporation basis. You cannot deduct a 2014 loss in excess of your basis. Injecting capital or making a direct loan to your business before year-end can help increase your basis.

5.       Buy now; pay later. If you need equipment or business supplies before the end of the year but have cash flow concerns, consider making needed purchases with your credit card. You can deduct the purchase this year even though you won’t pay the credit card bill until next year. 

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