11 Best Tax Planning Moves for Business Owners
Here's a detailed overview of some of the best tax planning moves for business owners:
1. Set Up a Business Retirement Account:
Consider options like Solo 401(k), 401(k), or SEP IRA to save for retirement while enjoying tax advantages.
2. Pick The Right Tax Election:
Choose between C Corp, S Corp, Sole Prop, or Partnership based on your revenue level and long-term goals.
3. Maximize The QBI Deduction:
Leverage the Qualified Business Income deduction to lower your taxable income effectively.
4. Hire Your Spouse or Older Kids:
Bring family members into the business to benefit from deductions and potential retirement savings.
5. Accelerate or Defer Income:
Time income receipt strategically to optimize tax liabilities based on current and future income levels.
6. Qualified Opportunity Zone Investing:
Consider investing capital gains in Opportunity Zone projects for tax deferral and potential growth benefits.
7. Donate To Charity:
Utilize charitable contributions to lower taxable income and potentially avoid capital gains taxes on appreciated assets.
8. Take Advantage Of An HSA:
If available, contribute to a Health Savings Account for triple tax advantages: tax-deductible contributions, tax-deferred growth, and tax-free withdrawals for qualified medical expenses.
9. Roth Conversions:
Convert pre-tax assets to post-tax assets during low-income years or market downturns to take advantage of lower tax rates.
10. Real Estate:
Explore tax advantages in real estate investments, including bonus depreciation, cost segregation studies, 1031 exchanges, and qualified opportunity zones.
11. Pre-tax Spending:
Maximize pre-tax spending opportunities on business-related expenses to lower taxable income effectively.
Implementing these strategies requires careful planning and coordination with financial professionals to optimize tax savings and long-term financial goals. If you have any more questions or concerns about how you can plan your taxes more efficiently, please feel free to call or email me at (615) 844-3398 or Jim.Maddux@raymondjames.com.
Disclosure:
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
