The Biggest Question You Need to Answer for Your Business Year-End Planning
It’s September. Back to school, back to work. It’s also time to think about year-end planning. I know it’s early for a lot of you, especially those who think your tax decisions are made after year end. This year, though, is unique. There are 5 very important things you need to do NOW.
1) Get an accurate estimate of your taxable income.
Your taxable income is the gateway to getting a big tax break or not. If you’re married, filing jointly, the income threshold amount is $315K. If you’re single the amount is $157.5K. If you’re over that, the calculations for tax breaks gets complicated. And, in some cases, you might not get them at all.
Once you know how much your taxable income will be for the year, determine whether you need last minute year-end taxable income reduction strategies. As much as possible, you want to stay below the income threshold.
For some ideas on how to do that, make sure you read your copy of Taxmageddon 2018 as soon as possible.
2) Know whether you have a SSTB or product based business.
A SSTB is a Specified Service Trade or Business. Recent Treasury Regulations have further defined what counts, and what doesn’t. Don’t assume you know the answer! Go back through this blog and read the previous 8-part series on the new Treasury Regs.
The 20% pass-through entity reduction phases out for SSTBs once you hit the taxable income threshold. Can you reduce your taxable income? Or, can you split off some components of the SSTB so that you still get some of the reduction? (Remember to watch the wage limitation if you plan to do that.)
These brief two paragraphs take up pages and pages of strategies in Taxmageddon 2018. For now, know where you are with your taxable income and the character of your business income. If you might have a challenge, act NOW!
Read Taxmageddon 2018. Join the coaching class. Hire me for a private consultation. Whatever course you take, don’t ignore this massive tax change. Take action now.
3) Buy depreciating assets in September…NOW.
One of the surprising changes from the Treasury Regs released 8-8-18 was to find out that the assets you buy in the last few months might not help you with tax reduction! If this is applicable to you, or even if you’re afraid it might be, you need to buy those assets NOW before it’s too late for them to qualify.
The new “last minute” tax planning happens in September.
4) Repair or Improvement? Learn the new strategies.
In the past, we always looked for ways to expense real estate improvements as repairs. Improvements had to be capitalized and depreciated over time. Repairs were written off right away. What’s not to love?
A lot. The Trump Tax Plan has changed this. You may actually be better off capitalizing an asset if you are relying on the “wage limitation rule”. If you’re not sure what that is, pick up your copy of Taxmageddon 2018 and read Section 3. This is THE section for business owners and real estate investors who want to pay less in taxes.
5) Start a business if you don’t have one.
This is my mantra. Start a business. It’s never been more important than now, after the Trump Tax Plan.
If you’re worried about losing your itemized deductions, start a business! If you think the new tax plan isn’t fair, you’re right. Start a business!
The strategy here is START A BUSINESS!
BONUS! Three more strategies for people who are ready to make the required charges:
- Buy Taxmageddon 2018! Taxmageddon2018.com
- Register your copy of Taxmageddon 2018! Taxmageddon2018.com
Once you’ve registered your book, you can access the Insider’s Group JUST for Taxmageddon readers. Info is in Chapter 16.
- Leave a review on Amazon! Every 4 or 5 star review helps spread this tax saving message further with the Amazon algorithm. Taxmageddon2018.com
The Trump Tax Plan has changed year-end tax planning. If you wait until next year to find out how it’s changed, you’re going to be paying a whole lot more in taxes.