Action Packed Year End Planning

Straightforward Tax Advice!

Author

Aaron Stegner
December 06, 2024

Welcome to the first issue of the Stegner CPA newsletter.

This issue will have a lot of great content for business owners crafted by me!

Minnesota Pass-Through Entity Tax (S-Corp and Partnerships)

S-Corps and partnerships can elect to pay Minnesota tax on behalf of the shareholders making the payment tax deductible.

Check out the video 👇️ 

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Reasonable Wage (S-Corp)

Remember a key provision and hot topic of being an S-Corporation is paying the officers a reasonable compensation!

If you want my help with a reasonable wage analysis let me know.

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Accountable Plan (S-Corp)  

An S corporation can pay the owner for the costs of a dedicated home office tax free under an "accountable" plan.

Check out the video👇️ It is a little longer because of the detail!

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Business Year End Planning

  1. Invest in Business Equipment: If you’re considering purchasing new equipment, doing so before year-end can allow you to take advantage of depreciation deductions.

  2. Defer Income: If possible, defer some income to the next year, especially if you expect to be in a lower tax bracket.

  3. Accelerate Expenses: Paying upcoming expenses now, like supplier invoices or rent, can increase your deductions for the current year.

  4. Review Your Business Structure: Ensure your business is structured optimally for tax purposes. Sometimes, restructuring can lead to significant tax benefits.

  5. Claim Home Office Deductions: If you work from home, you may be eligible for home office deductions, which can include a portion of your housing expenses.

  6. Make Estimate Payments: Paying business and personal estimate payments ensures that you do not pay penalties and interest. They may also help ensure you qualify for other business elections.

  7. MN PTE Election: Make estimate payments and pay fourth Quarter before year end.

  8. Utilize Tax Credits: Be sure to explore all available tax credits, such as the Research and Development credit, which can directly reduce your tax liability.

Individuals Year End Planning

  • Maximize Retirement Contributions: Contribute to your employer provided retirement plan.

  • Contribute to an HSA: If eligible contribute to an HSA and get the triple tax benefit!

  • Harvest Tax Losses: If you have investments that have lost value, consider selling them to offset gains and potentially reduce taxable income.

S-Corporations Year End Reminders

  • If you want to be an S - Corporation for 2025 we need to file Form 2553 by March 15, 2025.

  • Don’t forget to add your health insurance to your W2.

  • Personal miles on an S-Corporation vehicle need to be added to the W2.

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The information provided here is for informational purposes only and should not be construed as or relied upon for tax or legal advice. This information is based on the laws and regulations in effect at the time of issuance, and we do not undertake any obligation to update this information after the date of its release. Please speak with your tax professional or attorney for guidance specific to your circumstances.