Returning Value Blog

Don’t think that year-end tax planning is strictly limited to individuals. A calendar-year business can also keep taxes for 2015 to the bare minimum with some astute planning at the end of the year. Here are five techniques for consideration by small-business owners.

As another year draws to a close, the tax moves you make or don’t make, can have a significant impact on your 2015 tax return. Fortunately, there are plenty of tax-saving opportunities available to individual taxpayers, even if certain tax provisions are not resolved until the waning days of the year. Here are seven ways you may be able to reduce your tax bill for 2015.

As the summer months wind down, year-end tax planning will become a hot topic for many client service professionals. Whether it’s the closely held business owner or a high-net-worth individual, income taxes represent a significant outflow for our clients. With top rates of 39.6% on ordinary income, 20% for long-term capital gains plus a 3.8% Net Investment Income Tax (NIIT), our tax environment requires us to find favorable opportunities that generate tax savings for clients. If not already addressed on a regular basis, year-end planning is the last chance to evaluate opportunities before the year comes to a close. As conversations begin to shift toward year-end planning, here are a few strategies to consider.

A real estate owner may be contemplating the renovation of an older building in a historic part of town or a place that otherwise has historical implications. Fortunately, the federal tax law provides some incentives. Before you start tearing down walls and putting up a new façade, follow the steps for having the building certified as a historic structure. The payoff is a tax credit—a dollar-for-dollar reduction of your tax bill—equal to 20% of the renovation costs.

In the past, it was difficult to qualify for medical expense deductions. Now, some pundits would say that it is “nearly impossible.” Based on tax law changes that took effect in 2013, most taxpayers can deduct only unreimbursed expenses in excess of 10% of their adjusted gross income (AGI), up from 7.5% of AGI under prior law. For taxpayers who are aged 65 or older, the threshold remains at 7.5% of AGI, but only through 2016.

If you are trying to sell appreciated commercial real estate in today’s market, you may have to compromise. For instance, if you refuse to budge on price, you might have to make other reasonable concessions, such as agreeing to an installment sale for a buyer with limited liquidity. As the name implies, the buyer pays you in a series of installments instead of providing all the cash up front.

This could actually be beneficial from a tax perspective if payments are made over two years or more. In that case, not only do you defer some of the tax due on the appreciation in value, but you may reduce your tax liability.

The summer is not just the season for recreation and relaxation. It can also be the time to reduce your 2015 tax liability. Here are eight prime examples for individuals and small-business owners:

In May 2014, the FASB issued ASU 2014-091 (the new revenue standard), establishing a comprehensive revenue recognition standard for virtually all industries in U.S. GAAP, including those that previously followed industry-specific guidance such as the real estate, construction and software industries.

Until recently, software development and manufacturing have been very different industries. Under the recent Internal Revenue Code Section 199, Domestic Production Activity Deduction (DPAD), these industries may be meeting the same definition. This could mean a significant permanent tax deduction for software developers.

Although the government has chipped away at some of the biggest tax shelters for individuals, at least one solid foundation is still standing: your home. During the period when you own a home, it can be a source of valuable tax deductions for mortgage interest and property taxes. Even better, if you sell the home at a huge profit, you may be able to pocket all or most of the gain from the sale—tax-free.