Last week I wrote about 21 end of year tax planning moves W2 income earners can make. So of course I have to follow that up with a similar post for business owners.
Let’s walk through 23 impactful end of year tax/financial planning moves business owners can make!
- Max out your 401k, Solo 401(k), etc. on the employee side
- Max out your 401(k), Solo 401(k), Sep IRA, etc. on the employer/profit sharing side
- Max out Roth IRA/backdoor Roth IRA
- Max out your HSA if possible
- Max out 529 to the state tax benefit
- Maximize QBI – this can be through W2 salaries or profit
- Evaluate entity structure for 2024
- Review books and ensure everything is correct
- Consider PTET (paying state taxes via the business which makes it a deduction)
- Defer/accelerate income
- Accelerate certain expenses
- Use dependent care FSA funds
- Use FSA funds as most are use it or lose it
- Do tax loss harvesting on your taxable investment accounts
- Do some tax gain harvesting with your taxable investment accounts
- Do Roth conversions to maximize lower tax brackets or just the bracket you are in
- Look through paycheck/business profit and make sure you have withheld enough for taxes or have saved enough for what you will owe
- Donate cash to charity (maybe even consider bunching/donor advised fund to get even more in deductions)
- Donate highly appreciated securities (before selling to avoid the capital gains tax)
- Do a cost segregation study on an investments property and bonus depreciate it while bonus is still at 80%
- Invest in a qualified opportunity zone if you have large capital gains to defer
- Prepay property taxes to hit $10,000 max deduction (if married)
- Use the annual gifting limit to help move money to others in your family
Go make these now, the time is running out for this year.
