You may be able to contribute up to $6,000 to a personal IRA, depending on your eligibility. However, go to your benefits adviser to determine how much you can contribute because "highly paid" individuals are subject to limits. You might save up to $58,000 in your 401(k) retirement plan this year, depending on how much your employees contribute. Contribute to your retirement account to the fullest extent possible. You can deduct the cost of these assets by selling them and then writing them off.Ĥ. Use the following two weeks to get rid of old inventory and old, non-collectible receivables from your books. Make sure your balance sheet is in order.Īcknowledge that those long-overdue receivables are unlikely to be paid and that the "fantastic bargain" you struck five years ago is still collecting dust in your warehouse. This is not only a terrific method to save money on your taxes, but it can also serve as a reminder to potential contributors to give before the benefit expires if you're involved in a charity.ģ. After 2021, the additional personal deduction will be eliminated, and the business deduction will be reduced to 10% of your company's income. You can take a $300 deduction ($600 for those filing jointly) on your tax return this year, in addition to the standard deduction, thanks to previous COVID-19 stimulus packages, and your firm can deduct up to 25% of its income for charitable contributions. Even if you're financing the purchase, the regulations enable you to deduct the cost as long as the item is in use by the end of the year. And keep in mind that you don't have to pay for this right away. You can buy machines, automobiles, computers, software, furniture, and other types of capital equipment and deduct up to $1,050,000 this year instead of depreciating them over time, thanks to accelerated depreciation regulations. Although it's critical to be proactive and employ sound tax-planning methods throughout the year, you may still take steps now to save money for your company before the year closes in 2021. If you own a small business, taxes are almost certainly one of your top expenses.
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