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Tax Planning 2022:
Top Tips for Your Business

tax savingsCan you afford to NOT take time to save on taxes?

Smart business owners realize that year-end adjustments for tax purposes can save LOTS of money! As we approach the end of 2022, let's look at some key tax minimization strategies for your business.

1. Accelerate income? Depending on your 2022 income and projected 2023 income, this is an option that can a major difference in your tax bill. Each situation is different, so talk to your CPA (i.e., it might make sense to defer income).

2. Defer or accelerate expenditures? Again, depending on your situation, consider either deferring or accelerating expenses. If your business is having a bad year in 2022 but you expect a much better 2023, consider delaying the payment of your expenses, especially if tax rates go up.

It is important to note that by choosing to accelerate expenses into 2022, you will need to continue that pattern at the end of 2023, or there will likely be a bump in taxable income in 2023. This should be part of a strategic tax plan, projecting income and expenses for both the current year and following year and determining how to best minimize taxation.

If you are accelerating expenses to 2022, here are some items to consider:

  • Rent
  • Insurance
  • Employee bonuses (bonuses to owners and/or related parties have additional rules)
  • Utilities (phone, water and electrical)
  • Repairs and maintenance for office equipment
  • Office supplies
  • Annual memberships
  • Computer repairs/upgrades
  • Travel expenses
  • Advertising
  • Vehicle expenses
  • Dues and subscriptions
  • Postage, Fax and Delivery
  • Professional fees

Some specific tips: Consider year-end bonuses to worthy employees, especially to keep them happy if the recruiting market is slim in your area. Since many businesses offer year-end discounts, you may find that it is cheaper to buy before December 31st than after January 1st. If you have business travel that is necessary, book your 2023 flights, hotels and rental cars. Use your credit card or your bank line of credit, then pay those off on January 1st (however, consider your financial institution's billing cycle and any interest expense policies). For your sales staff, all reimbursable expenses need to be submitted to accounting so that the payment is made in the current year.

3. Purchase equipment. If you're planning on buying equipment, consider doing it before the end of the year to take advantage of the Section 179 expense deduction (rather than requiring the property to be capitalized and depreciated). This property is generally limited to tangible, depreciable, personal property which is acquired for use in the active conduct of a trade or business. Note that equipment must be "placed in service," not just ordered and/or deposit paid.

4. Review retirement plan options. Depending on the type of plan, you may be able to start or add to your retirement plans. You can also deduct set-up and administrative costs (including legal and accounting fees, and any expense related to educating employees about the plans) for retirement plans. In most cases, if the retirement plan is set up before the end of the year, the business can deduct the pension contribution in 2022 even though it is not paid until the due date of the tax return.

5. Develop a multi-year horizon. Some tax moves that you make in 2022 could end-up hurting you in 2023, so plan for several years (e.g., if you put too much in one year, you might be climbing into a higher bracket and paying more tax). Especially if your business is considering expansion, relocation or some other major change, it is important to look at the long-term tax ramifications.


2023 is fast approaching and the tax professionals at MyCFO can offer invaluable expertise. Learn more about our Tax Planning services and contact us today for a free initial consultation!

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Medway, MA 02053







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