5 Year-End Tax Tips for Business Owners
Business owners may be sitting on opportunities to lower next year’s tax bill. See if these 5 year-end strategies can work for you!
Tax planning done with the audit exposure in view.
Entity choice and elections, timing of income and deductions, estimated payments, retirement and equity decisions, and the crypto strategies that still work. Every recommendation is made by people who also prepare the return and defend it, so the plan is one the return can carry.
What planning covers
A tax plan is a set of decisions made before the year ends and before the deadlines that cannot be moved: the S corporation election, the 83(b) election within 30 days of a grant, the Section 1202 holding period, estimated payment safe harbors, and the year in which a gain or loss is realized. We identify which of these apply to you, model the alternatives, and put the ones that make sense in place, with Gordon Tax handling the filings.
For an owner, the biggest levers are how the business is taxed and how you are paid from it. We look at whether an S corporation election makes sense and what a defensible salary is, whether a retirement plan should be part of the picture, when to recognize income and take deductions, and what to pay in estimates so there is no penalty in April. If you live or work in more than one state, we sort out which state taxes what.
Crypto has planning opportunities that stocks do not, and they only work with wallet-level records. We identify losses that can be realized without a wash sale rule, choose which lots to sell and document the choice, watch holding periods so gains turn long-term, and structure charitable gifts of appreciated coins. Each move is done in a way that holds up if the return is examined. Crypto tax
Most of the tax on a startup outcome is decided early. We handle the 83(b) election within its 30-day window, track the Section 1202 holding period so qualified small business stock gain is excluded, time the exercise and sale of equity compensation, and structure a company sale before the terms are set rather than after. Mergers and acquisitions
If you moved, work remotely from another state, or live abroad, residency and sourcing rules decide where your income is taxed. We establish residency correctly, allocate income between states, and for those overseas, apply the foreign earned income exclusion or the foreign tax credit and any treaty position, with the foreign reporting that comes with it. International tax
The people who do the planning
Planning is done by a corporate attorney who began in tax, with a tax attorney and CPA, and executed by Gordon Tax.
Andrew Gordon
MANAGING PARTNER
Michael Brandwein
PARTNER | CORPORATE LAW
Tax planning | Skokie, Illinois and nationwide
Why plan before year end
Most tax is decided by December 31, not April 15. Once the year closes, the return records what happened; it cannot change it. Planning during the year is where the choices exist: which lots to sell, whether to make an election, how to pay yourself from the business, and when to recognize income. A fall planning meeting with the current numbers is the single most valuable hour in the tax year for most business owners and investors.
Start with these guides
How to Avoid Crypto Taxes: 12 White Hat Strategies to Lower Your Bill
Are you wondering how to avoid crypto taxes without breaking any rules? Discover 12 tried-and-true strategies from crypto accountants who do this every day.
Tax Considerations During An M&A Deal
Before any M&A deal, it’s important to be aware of the tax considerations involved with your deal and how they may affect your business!
IRS 83(b) Election: Save Taxes on Early-Stage Stock
The 83(b) tax election can save you many thousands of dollars, but there’s a short window of time to use it!
Tax planning | Individuals, business owners, crypto investors
What a planning engagement looks like
We start with last year’s return and this year’s numbers, identify the decisions available before year end, model the ones that matter, and give you a short written plan with the actions, the deadlines, and the estimated effect. Gordon Tax implements the elections and prepares the return the plan was built for. Fees are quoted after the consultation.
