2018 Year End Tax Planning for Business and Individuals
This year was big.
The barrage of tax changes and updates were so far-reaching, that every individual and business has been touched by it in some way. With the Tax Cuts and Jobs Act (TCJA) changing the playing field in the tax realm, you may want to consider making some strategic year-end moves to help minimize your tax burden.
We’ve included some of the most frequent approaches that individuals and businesses should consider before the New Year. Take a look at the list below and consider whether any of these suggestions are healthy moves for you. We can help evaluate your position so you can decide the best moves.
With so many changes in the tax law, it is strongly recommended to have a tax plan in place. Even if your 2018 income is very similar to your 2017 income, the tax law changes will make your tax results very different. This is due to several eliminated deductions, eliminated personal exemptions and lower tax rates across the board.
Businesses have greatly been impacted by the TCJA for 2018, including the corporate tax rate cut to a flat 21% (previously 35%), and the addition of the QBI deduction (20% business income deduction) for taxpayers other than corporations (noted above). The TCJA also expanded the small business gross receipts threshold to $25 million, which allows businesses to elect or remain eligible for various accounting methods, such as utilizing the cash method of accounting and treating inventory as non-incidental materials and supplies or to avoid the uniform capitalization rules for resellers and manufacturers.
These are some of the year-end steps that can be taken to minimize your tax burden. We can help tailor a customized plan that will work best for your tax planning goals. Additional ideas and information may be found in our Tax Planning Guide.
Please contact your BMF tax advisor if you would like to review any of the items mentioned, schedule a tax planning strategy session, or discuss potential implications of the various tax law changes.
Cindy H. Mitchell?>
Nathan A. Lieb?>
About the Authors
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