John Briggs covers year-end tax moves: changing your business structure, renting your home to your company, setting up a medical reimbursement plan, paying family members, and accelerating equipment purchases for bonus depreciation. He warns against buying assets just for the tax break and points to a free checklist of 28 strategies at insighttax.com/yearend.
What are some commonly missed tax strategies you should implement before the year ends? I'm John Briggs with Insight Tax, and I want to go over a few of these things, but we actually have a list of 28 tax strategies, and the things I'm going to share with you are going to be on that list, but there's a lot more. So a couple things you can do regardless of your income level or from a strategy standpoint low-hanging fruit, if you will. Do you have the right entity structure? That is something you can change before the end of the year. Do you need to be an S corporation? Do you need to add something else in? Are you a single-member LLC? Is that the right strategy? Do you have a partnership? Do you need to look at adding something into that partnership's tax structure? You haven't till the year end to fix all those things. Another strategy that we love, we call it corporate rent. It's a strategy where your business will rent your house from you. It creates a tax deduction for you, lowers your taxable income. It's a great strategy. There's a lot of details on how to do that, so if you want to check out our blog or go to our website insighttax.com, type in corporate rent. I think even if you Google corporate rent, we should be— Some of the higher ranking searches there. Figure out, I mean, I don't, we have told you how to do it, but for the sake of this video, I'm not going to go into detail of all these strategies, but that is something definitely worth looking at, very low-hanging fruit. If you have a business, do you have health insurance things? Maybe look at maybe setting up a Self— I know this term, self-employed medical reimbursement plan. Again, we have blog posts on these things. Something that if you have some extra cash, paying your kids could be a good tax strategy. Are you planning on buying assets between now and March of next year? Maybe buy that equipment now. Bonus depreciation laws often change. Supposedly they're going to change at the end of this year, so we can't guarantee that the way they're currently taken into account on your taxes will go forward. So buying equipment now before the year ends makes sense. I do not recommend buying an asset for the sake of saving taxes. Sometimes I get a client come to me and he's like, hey, should I buy a boat? And my answer is, I don't know, should you buy a boat? If buying a boat makes sense for you and the lifestyle you want, great. Let's look at your business and see if having a boat as an asset makes sense. Sometimes it doesn't, and other times just buying a boat for the sake of it isn't a great use of your cash. You want to be making tax strategy decisions that, yes, lower your taxes, but help you grow your wealth. And as an accounting firm, we're not just looking at lowering your taxes. What is your other— what are your other plans that you're trying to do with your financial wealth? Then let's play with the taxes to make sure that those complement what you're trying to do. Depending on what you have going on, R&D credits, if you have stock that's appreciated in value, Donating that to charities, if you're doing that anyways, can help reduce capital gains that you wouldn't need to pay, plus you get the charitable contribution. So there's a lot of things there. We have a list, it's 28 tax strategies, and we have the list created so that even if you aren't using us, take the list, take it to your accounting professional and— Have them go through it, and there they might get some ideas for you. So check it out at insighttax.com/yearend. So insighttax.com/yearend. Twenty-eight tax strategies to consider before the year ends. Once December thirty-first has passed, that year is locked in. There are a few exceptions depending on retirement plans that you have set up or can get set up. But for the most part, when the year ends, that's the best thing about taxes, there's always an exception. But when the year ends, for the most part, it's locked in. And I wouldn't wait until December 31st to do some of these things. Like if you need an entity switch, in years past, the IRS has shut off their desire. I mean, they never have the desire to help you. They just want your money. But they've like locked down their EIN system so that you can't get a new EIN, which is related to your entity, in the last couple weeks of the month. So don't delay, get this tax strategy list now, look at it. It's the exact same list that all of our professionals go through when we're doing year-end planning sessions with our clients. So download it for free, insighttax.com/yearend. Remember, profit is a choice. Have the courage and wisdom to choose it.
