As the year draws to a close, small business owners and investors alike are presented with a crucial opportunity to optimize their financial positions through strategic tax planning. Implementing effective tax-saving strategies can significantly impact your bottom line and set the stage for a more prosperous future. Here are key considerations to keep in mind:

Review and Maximize Deductions: Small business owners should meticulously review expenses and ensure that all eligible deductions are claimed. This includes business-related expenses such as equipment purchases, office supplies, and professional fees. Maximizing deductions reduces taxable income, offering immediate savings.

Leverage Retirement Contributions: For both business owners and investors, contributing to retirement accounts can yield substantial tax benefits. Contributions to a Simplified Employee Pension (SEP) IRA or a Solo 401(k) can be deducted from taxable income, reducing the tax burden while securing financial futures.

Capitalize on Depreciation: Small business owners with eligible assets should consider taking advantage of depreciation. Accelerated depreciation methods allow for larger deductions in the earlier years of an asset’s life, providing a more immediate tax benefit.

Harvest Investment Losses: Investors can strategically sell underperforming investments to offset capital gains. This process, known as tax-loss harvesting, helps minimize tax liability on investment gains by using losses to counterbalance them.

Explore Tax Credits: Investigate available tax credits for small businesses, such as those for research and development or energy efficiency improvements. These credits can directly reduce the amount of taxes owed.

Consult with Professionals: Engage with tax professionals or financial advisors to ensure comprehensive and personalized advice. Their expertise can help uncover additional opportunities and navigate complex tax regulations.

By proactively employing these year-end tax-saving strategies, small business owners and investors can not only optimize their current financial standing but also lay the groundwork for continued success in the coming years. Remember, the key to effective tax planning is staying informed and taking a proactive approach to financial management.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.

This article was provided by Philip J Ambrose, CFP®

CERTIFIED FINANCIAL PLANNER™

Rosenberg Alvis & Ambrose Wealth Management

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