TAX PLANNING FOR BUSINESSES
Businesses seeking to maximize tax benefits through 2013 year-end tax planning may want to consider two general strategies:
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(1) |
Use of traditional timing techniques for income and deductions; and |
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(2) |
Special consideration of significant tax incentives (known as tax extenders) scheduled to expire at the end of 2013. |
IMPACT.
Business incentives scheduled to end with 2013 include bonus depreciation, enhanced Code Sec. 179 expensing, the Work Opportunity Tax Credit, and many other business-friendly provisions. Although Congress has routinely renewed these tax extenders in the past, current politics over budget concerns, and the impression that the economy may no longer need extraordinary stimulus measures, may point to 2013 year-end as the last occasion for businesses to take advantage of one or more of these special benefits.
IMPACT.
Ultimately, the fate of many of the tax extenders may be decided when Congress takes up comprehensive tax reform. However, as partisan politics continue in Washington, prospects steadily diminish for a “grand bargain” in which the extenders would carry a January 1, 2014 effective date.
New for business owners. Businesses should also be aware of those tax rules that are new-for-2013. In particular, increased tax rates on higher-income individuals effective for 2013 may impact business strategies directed toward minimizing taxes for business owners with either pass-through or dividend income. Also important for year-end 2013, are tax strategies in connection with recently-issued final “repair” regulations.
