Tips for Personal and Business Tax Planning
We've reached the end of the third quarter of 2014 and it's time to address both personal and business planning issues.
While there are multiple issues that should be considered depending upon your specific situation, here are just a few which are worth your consideration during the next few months.
Determine if your Year To Date Tax Payments are sufficient
Whether you pay your tax through payroll withholding or estimated tax payments (or both) it's a good idea to look at where you stand at this point in the year to make sure that you both (1) avoid the need to pay an underpayment penalty and (2) avoid the dreaded "surprise" when your tax return is prepared in 2015 and you discover that you unexpectedly owe a significant amount of tax. Reviewing this now will provide you with time to take any available tax planning steps in order to manage that tax burden.
Take advantage of the $25,000 Expense Election for Capital Equipment Purchases in your business
While this limit has been significantly reduced from the $500,000 limit that existed in 2013, there is still an opportunity to expense the first $25,000 of Capital Equipment purchases if the assets are placed in service during 2014. Keep in mind that there can be no more than $200,000 in total Capital Purchases during 2014 in order for you to get the benefit of the full $25,000 "off the top" deduction. Additionally (1) vehicles have specific limits and (2) the deduction cannot create a loss. Please discuss with us in order to determine if you would benefit from this deduction.
Revisit your 2014 Business Goals
In a perfect world you have been evaluating your successes and shortfalls consistently throughout the year but sometimes daily life gets in the way. If that is the case, now is the time to take stock of how you are going to achieve your 2014 goals as well as begin to look forward to your 2015 goals.
If you have, in fact, been successfully monitoring these goals throughout the year – Congratulations – now is also a great time to begin or continue planning for 2015.
Brian J. Clarke has over 25 years of public accounting experience. He is a Certified Valuation Analyst (CVA) and is certified to perform business valuations. He is a graduate of John Carroll University. Brian's other areas of expertise include: Manufacturing, Commercial Printing, Service Industries, Syndicated Real-Estate Partnerships, and Construction.