year-end - Linkenheimer LLP CPAs & Advisors

4 Ideas That May Help Reduce Your 2023 Tax Bill

If you’re concerned about your 2023 tax bill, there may still be time to reduce it. Here are four quick strategies that may help you trim your taxes before year end.

Accelerate deductions and/or defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2024 payment in December, you can deduct the interest portion on your 2023 tax return (assuming you itemize).

Pushing income into the new year also will reduce your taxable income. If you’re expecting a bonus at work, for example, and you don’t want the income this year, ask if your employer can hold off on paying it until January. If you’re self-employed, you can delay sending invoices until late in December to postpone the revenue to 2024.

You shouldn’t follow this approach if you expect to be in a higher tax bracket next year. Also, if you’re eligible for the qualified business income deduction for pass-through entities, you might reduce the amount of that deduction if you reduce your income.

Take full advantage of retirement contributions. Federal tax law encourages individual taxpayers to make the […]

By Linkenheimer LLP|2023-12-05T16:55:42+00:00December 5th, 2023|individuals, tax planning, year-end|0 Comments

Proactive Year-End Tax Planning: Navigating 2023’s Tax Landscape with Linkenheimer LLP

As the year winds down, businesses are presented with the critical task of year-end tax planning — a complex endeavor, especially with the ever-evolving tax regulations and economic climate of 2023. For savvy business owners, this period is not just about compliance, but an opportunity for tax optimization. Linkenheimer, with its deep understanding of current tax laws and dedication to client success, stands ready to guide businesses through the maze of tax planning strategies.

Strategies for Year-End Tax Planning

Maximize Deductions and Credits

Businesses should review their expenditures throughout the year to ensure they capitalize on all available deductions and credits. This could include investments in energy-efficient equipment, research and development expenses, and charitable contributions.

Defer Income and Accelerate Expenses

If your business anticipates a lower tax rate in the next year, it may be beneficial to defer income to the following year and accelerate expenses into the current year, thereby reducing taxable income.

Consider Equipment Purchases

Section 179 and Bonus Depreciation are potent tools for businesses. Evaluate your need for new equipment or technology upgrades — purchasing before year-end can result in substantial tax savings.

Assess Inventory Strategy

Review your inventory management strategies. If you use the accrual method, consider […]

By Linkenheimer LLP|2023-11-15T19:05:19+00:00November 15th, 2023|tax planning, year-end|0 Comments

Year-End Checklist Guide for 2023

Year-End Close Reminders/Considerations

As we wrap up the year, it is crucial to address several key financial and administrative tasks to ensure our records are accurate and complete. Below is our comprehensive checklist to guide you through the year-end close process.

General Cleanup and Tax Documents:

Record prior year’s adjusted journal entries, if any.
Review financial statements and perform any general accounting cleanup.
As tax documents are received, ensure financial statements agree to the documents (when applicable) and compile them to submit to CPA for income tax preparation.
Normalize Shareholder Distributions or make sure the partner/member distribution method is consistent with the entity agreement, if applicable.
Reconcile liability/loan balances.
Identify and reclassify any personal expenses that have been paid by the company not included in the shareholder/partner’s distribution/draws accounts. Including:
- Travel expenses
- Meal & entertainment
- Etc.

Fixed Assets:

Keeping in mind your capitalization policy:
- Review fixed assets account detail and verify that fixed assets are properly reflected on the Balance Sheet, including:
- Make sure the new assets description is clear.
- Review construction in progress asset account, if any, and reclass all of the applicable assets to corresponding asset accounts if placed in service during the […]

By Linkenheimer LLP|2023-11-15T17:17:15+00:00November 15th, 2023|year-end|0 Comments

Selling Stock By Year-End? Watch Out For The Wash Sale Rule

If you’re thinking about selling stock shares at a loss to offset gains that you’ve realized during 2022, it’s important to watch out for the “wash sale” rule.

The loss could be disallowed

Under this rule, if you sell stock or securities for a loss and buy substantially identical stock or securities back within the 30-day period before or after the sale date, the loss can’t be claimed for tax purposes. The rule is designed to prevent taxpayers from using the tax benefit of a loss without parting with ownership in any significant way. Note that the rule applies to a 30-day period before or after the sale date to prevent “buying the stock back” before it’s even sold. (If you participate in any dividend reinvestment plans, it’s possible the wash sale rule may be inadvertently triggered when dividends are reinvested under the plan, if you’ve separately sold some of the same stock at a loss within the 30-day period.)

The wash sale […]

By Linkenheimer LLP|2022-12-14T20:28:01+00:00December 14th, 2022|retirement, year-end|0 Comments

Strategies For Investors To Cut Taxes As Year-End Approaches

The overall stock market has been down during 2022 but there have been some bright spots. As year-end approaches, consider making some moves to make the best tax use of paper losses and actual losses from your stock market investments.

Tax rates on sales

Individuals are subject to tax at a rate as high as 37% on short-term capital gains and ordinary income. But long-term capital gains on most investment assets receive favorable treatment. They’re taxed at rates ranging from 0% to 20% depending on your taxable income (inclusive of the gains). High-income taxpayers may pay an additional 3.8% net investment income tax.

Sell at a loss to offset earlier gains

Have you realized gains earlier in the year from sales of stock held for more than one year (long-term capital gains) or from sales of stock held for one year or less (short-term capital gains)? Take a close look at your portfolio and consider selling […]

By Linkenheimer LLP|2022-12-13T16:06:29+00:00December 13th, 2022|capital gains, year-end|0 Comments