At Robert Hall & Associates, one of the tax strategies we cannot recommend enough for businesses in Glendale, Pasadena, Burbank, and other surrounding California cities is proactive corporate tax planning.
Whether you’re an established business or a growing startup, sitting down with one of our enrolled agents for corporate tax planning is a tax strategy any business in the Pasadena area and beyond can benefit from.
5 Corporate Tax Planning Tips for 2019
Here’s a few proactive tax planning tips from our enrolled agents to get you started:
1. Discuss Your Business Entity Type with a Tax Professional
The Trump Tax reform brought a number of changes to business tax laws including tax rates and deductions for 2018 and 2019. Depending on the business type you currently have, with the new tax laws, you may not be in the best spot to receive the maximum tax benefits and deductions. A CPA or Enrolled Agent can help determine if your current entity is sufficient, or a new entity classification is right for you.
2. Make Strategic Use of Charitable Contributions
If you own a C-corporation, you may be surprised to learn that c-corps are the only corporate entity that can deduct contributions to charities as a business expense (up to 10 percent of taxable income). Knowing the right time and amount to deduct charitable contributions can be a money saver for your business. Sit down with your tax consultant to plan how your c-corp can take advantage of this deduction.
3. Plan Your Purchases of Big Expenses
One new benefit of the Trump Tax Plan is a corporation’s ability to write off 100% of the cost of an asset in the year you buy it, rather than 50%. Moreover, the new depreciation law allows you the option to take the deduction over five years as well. Depending on your business’s financial goals and cash flow, you can time the purchase and tax deduction of big expenses to work out in your favor.
4. Contribute to Your Retirement Plan
This one’s for the business owners. If you own your own corporation, your most likely have a nice chunk of income coming your way. An easy way to reduce your personable taxable income for the year is through retirement plan contributions. By contributing to a tax-favored retirement plan like a SEP-IRA, defined benefit pension plan, 401(k), and SIMPLE-IRA, you may be able to reduce your tax liability enough to qualify for the 20% Pass-Through.
5. Don’t Save Tax Planning For The End of 2019
It’s important businesses don’t think of taxes as an end of the year event. Instead, in order to take advantage of as many tax deductions and money-saving opportunities available, corporate tax planning should be a year-round activity. A skilled tax professional like a CPA or Enrolled Agent can help you plan out your corporation’s financial decisions for the year to get you in the best place for tax season.
Your business is always changing. Our tax planning professionals take the time to understand your corporation’s situation and apply our knowledge of the ever-changing tax environment to help you make the best business decisions. If you are a California business owner residing in Glendale, Burbank, Pasadena, or surrounding areas and wish to learn more about our tax planning services call 818.242.4888 or fill out our contact form to sign up for a free 30 minute consult.