Thanks to the tax laws enacted late 2015, your company’s tax liabilities can actually be viewed as a controllable expense, rather than something over which you have no control whatsoever.
For the past several years, the uncertainty with regards to tax laws cast a long shadow and hindered our ability to undertake proper, effective tax planning.
Now, however, if a company and its shareholders can put together a solid financial plan and a 3 year budget, we can step in and help reduce taxes during this time period by employing several different techniques. This is great news, because we believe tax planning is a year-round strategy, and not something that should only happen in the last few months of the year.
Tax planning techniques include:
1. Accelerated Depreciation
This technique involves the depreciation of fixed assets at a fast rate early in their useful lives. This type of depreciation actually reduces the amount of taxable income early on in the life of an asset, therefore deferring tax liabilities.
The new tax laws allow us to write off up to $500k in fixed asset purchases in one year.
2. Pension and Profit Sharing Plans
By implementing a pension and profit sharing plan, we can create a corporate deduction at the same time as offering an incentive to owners and employees.
To get this up and running, we collaborate with specialist pension plan administrators. We bring them in to work with you and develop a plan of action that meets the needs of your business, and also reduces your tax bills.
3. Tax Credits
There are a number of tax credits available to you and your business covering a wide range of areas.
For instance, depending on the industry in which your business operates, you could have Research & Development tax credits just waiting to be used.
Or if you are growing and actively looking to recruit new team members, you could take advantage of employee tax credits. Particularly if you employ someone from a certain area or from within a target group.
And if your business is reliant upon motor vehicles, you could make the most of several different credits that are available for the purchase of different types of non-gasoline powered vehicles.
All Bases Covered
No matter where you are in the lifecycle of your business, Whittaker can help you get the most out of the new tax laws by planning ahead and identifying the best available options.
Even if you’re coming to the end of your career and looking to exit, we can keep your tax liabilities in check. For example, you could move on and pass your business to the next generation as a charitable contribution, all while we develop a strategy to effectively reduce capital gains payments.
By choosing to work with Whittaker & Company, you’ll rest easy knowing that all the bases are covered when it comes to planning for tax. From helping you make the most of your existing assets, to advising you on the best available profit sharing plans and tax credits, we’ll be there every step of the way.
If you’d like to speak to one of our advisers to discuss implementing an effective tax planning strategy, contact us today.
Tax returns, financial statements, IRS communications and similar items are vital to address and process, but they should not be the focal point. Think of these as tasks to get to the real work, which is providing you the information you need and an interchange of ideas to move you forward. The goal is to help you implement your strategies and vision. This is what we do!