Proactively Managing Taxes Can Be Your Business's Best Friend

Mid-year is an excellent time for business owners to reassess their tax strategy. With a proactive approach, you can plan ahead and take advantage of key tax deductions and credits before they expire. Thoughtful planning not only helps in saving money but also reduces your tax burdens. Navigating the complex world of tax law can be daunting, yet with the right knowledge, you can gain clarity and control over your financial future.

Research and Development Tax Credit

Contrary to popular belief, the Research and Development Tax Credit isn't just for tech companies. If you're working to improve your products or processes, you might qualify for this credit. Exploring this credit can lead to significant savings and propel your business innovation.

Qualified Business Income Deduction

• Applicable to sole proprietors, partnerships, S-Corps, and LLCs
• Offers a 20% deduction on qualified business income
• Set to expire at the end of 2025, highlighting the importance of timely action

Home Office Deduction

Utilizing a section of your home regularly and exclusively for business can unlock deductions on rent, utilities, and internet expenses. With more people working remotely, this deduction becomes particularly pertinent.

Section 179 Deduction and Bonus Depreciation

These allow businesses to deduct the full purchase price of qualifying equipment and software. With bonus depreciation, both new and used assets are eligible, making this a beneficial approach for upgrading business operations.

Meals and Entertainment Deduction

It's important to note that meals with clients or employees remain 50% deductible in 2025. Clarifying which meals qualify can keep your business social strategies cost-effective.

Business Vehicle Expenses

You can choose between deducting actual expenses or using the standard mileage rate. Whichever method you choose, maintaining a detailed mileage log is essential for accuracy.

State and Local Tax Deductions (SALT)

With the federal $10,000 SALT cap, pass-through entities can benefit significantly from PTE elections. Understanding and utilizing these options can be a game-changer for navigating local tax constraints.

Remember, every business has unique circumstances, and not every deduction will apply to everyone. Mid-year is a strategic time for tax check-ins. Engaging in professional tax planning now can set you up for maximum savings and financial stability. Take action today by reviewing your current strategy or scheduling a consultation for a personalized approach.