11/22/2024

Business Owners Tax and Financial Planning Strategies

As the year ends, business owners should consider these impactful tax and financial planning strategies. Here are 23 tactics business owners can incorporate:

1. Max Out Employee 401(k): Contribute the maximum to reduce taxable income and boost retirement savings.

2. Max Out Employer 401(k): Utilize employer contributions to further reduce taxable income.

3. Max Out Roth IRA/Backdoor Roth IRA: Contribute directly or via a backdoor method for tax-free growth.

4. Max Out HSA: Contribute to an HSA for triple tax benefits.

5. Max Out 529 Plan: Contribute to a 529 plan for state tax benefits and future education savings.

6. Maximize QBI Deduction: Optimize Qualified Business Income deduction to reduce taxable income.

7. Evaluate Entity Structure: Ensure your business entity aligns with future goals.

8. Review Financial Records: Ensure accuracy and compliance to avoid tax season issues.

9. Consider PTET: Pay state taxes through your business for potential deductions.

10. Defer/Accelerate Income: Adjust income timing to optimize your tax bracket.

11. Accelerate Expenses: Prepay expenses to increase current year deductions.

12. Use Dependent Care FSA: Cover eligible expenses to reduce taxable income.

13. Use FSA Funds: Spend FSA funds before year-end to avoid losing them.

14. Tax Loss Harvesting: Sell losing investments to offset capital gains.

15. Tax Gain Harvesting: Sell investments at a gain to utilize lower tax brackets.

16. Roth Conversions: Convert traditional IRA funds to a Roth IRA for tax-free growth.

17. Review Withholding and Estimated Taxes: Ensure adequate withholding to cover tax liability.

18. Donate Cash to Charity: Make charitable donations to reduce taxable income.

19. Donate Appreciated Securities: Avoid capital gains tax by donating appreciated securities.

20. Cost Segregation Study: Use bonus depreciation on investment property to reduce taxable income.

21. Invest in Qualified Opportunity Zones: Defer capital gains and benefit from tax-free growth.

22. Prepay Property Taxes: Maximize the $10,000 deduction limit by prepaying property taxes.

23. Use Annual Gifting Limit: Transfer money to family members to reduce your taxable estate.

The holidays and the end of the year are right around the corner. Act now to optimize your tax
and financial situation before the year ends.

IMPORTANT DISCLOSURE INFORMATION

Next Capital Management, LLC (“Company”) is an SEC registered investment adviser located in New York, New York.

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