Six powerful business Tax deduction strategies
The calendar year end is now upon us, and that means tax season is just around the corner! Will you benefit from all the expenses allowed to you and your business in 2021?
Here are six powerful business tax deduction strategies that you can leverage now:
- Prepay Expenses Using the IRS Safe Harbor – This means that Cash-basis taxpayers are allowed to prepay and deduct qualifying expenses up to 12 months in advance. Qualifying expenses include, but are not limited to, lease payments on business vehicles, rent payments on offices and machinery, as well as business & malpractice insurance premiums.
- Pause billing Customers in 2021 then bill them right away in 2022. – That’s right, just slide the billing into the beginning of next year.
- Purchase Office Equipment – as long as the new and used machinery, equipment, and certain qualifying vehicles are placed in service before December 31, 2021 a 100 percent deduction can be taken. You still have time but you’ve got to move fast!
- Use your Credit Card – charges that you make with your business credit card on or before December 31, 2021 can be deductible. If there is something your business will need, take advantage of the holiday deals and the tax deduction; purchase it using your credit card now!
- Ensure all possible deductions are stated – keep good documentation for your deductions and claim the legitimate deductions even when your deductions are higher than your income. If deductions are greater than your income, it creates a loss for the year and possible future years which will lower your tax liabilities.
- Improve the interior of non-residential property such as office buildings, retail stores and shopping centers after you’ve placed the building in service. – These improvements can be 100 percent deductible in 2021 as long as it is placed in service on or before December 31, 2021. Once again, you still have time but you’ve got to act now!
If you have any questions concerning deductions for year 2021, please don’t hesitate to call Susan at 630.523.5762. For more great tips on becoming a highly profitable business owner, check out Highpoint Advisory Services.