“An effective CFO, Finance Manager or CEO is extremely tax-minded. Executive top management (boards) are more inclined to offer security, incentives and praise to an accounting/finance executive that consistently delivers a low tax bill.”
“Family businesses allow tax savings through income splitting between parents, children or other relatives.”
“When buying a business get a written guarantee; ensure your purchase contract includes a stipulation that requires the seller(s) to promise to only sell the business if there are no taxes owed and that the seller(s) will be personally liable to the buyer if this turns out not to be true.”
When buying assets it is important to know the best way to purchase and depreciate to take advantage of tax loopholes. Capital expenses usually include the following assets: buildings, cell phones, computers and software, copyrights and patents, equipment, improvements to business property, inventory, office furnishings and decorations, small tools and equipment, vehicles and window coverings. Below you will find a more detailed account of these depreciation categories.
3 year property:
- metal fabrication
5 year property:
- small planes
- manufacturing equipment (for apparel)
- construction activity assets
- R&D equipment
7 year property:
- office furniture
- manufacturing equipment
- mining assets
- agricultural structures
- personal property
Commercial buildings can be depreciated over 39 years while residential rental real estate can only be depreciated over 27.5 years. Expenses incurred for improvements to sidewalks, roads, drainage facilities, fences and landscaping are depreciated over 20 years.
To learn more about Notable Bookkeeping’s tax planning, preparation and research services call us today at 201-937-3428.
“Avoid double taxation of a C Corporation’s dividend payout by structuring payments to shareholders as consulting fees. Shareholders must actually offer advice for the payments to be considered valid tax deductible transactions.”
As we all know, two things are certain in life, death and taxes. I personally enjoy doing my taxes but like everyone else I don’t enjoy paying them. In business, it is critical that you know all the deductions that are available to you when it comes to keeping your bottom line healthy and your tax payment as low as possible. See below for the top 10 business tax shelters you should know:
- Real Estate
- Pension Plans
- Municipal Bonds
- Health Insurance
- Life Insurance
- Tuition Assistance/Reimbursement
- Leasing Vehicles (offers larger deductions than owning one)
- Assets bought on credit (e.g.; computers, equipment, inventory, office furnishings, et cetera)
It is important that businesses keep a separate high yield savings account designated for taxes and automate quarterly deposits.
Notable Bookkeeping knows taxes. Let us help you with your tax planning and research needs. Contact us today