Tax Planning – Small Business, LLC, & S-Corp Owners

The end of the year is quickly coming upon us and we haven’t even had our Thanksgiving turkey. Regardless, if you’re a small business owner, it means a great deal of tax planning is needed to protect what you have earned. To that end, Businessweek has an end-of-year checklist for your consideration.

The key for the small business person to remember, especially if you’re just starting out or in the process of an expansion, is that 2011 has some special deductions for new equipment. According to the tax and jobs bill passed in 2010, small companies can deduct the full cost of equipment purchased (new or used) up to $500,000 (i.e., twice what was possible in 2010 and several times the scheduled amount of $125,000 for 2012).

Normally, the deduction is limited to the depreciated value of items over their life. However, if you do purchase more than $500,000 worth of equipment (up to $2 million), then you can use special “bonus” depreciation. There’s much that can be done with these deductions and you also might consider pushing your purchases into this year and even pre-paying them.

In general, if you’re a small business owner, then your company likely is to be rather entwined with your “personal life.” Additionally, if you are at the helm of an S-Corp or an LLC this is especially relevant and you’ll want to consider how your business finances and personal ones fit together for tax purposes. Estate planning in these situations requires experience and expertise like you’ll find at Idaho Estate Planning. Call us today to arrange for a consultation. Remember, good planning is no accident.

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