Year End Tax Planning and New Taxes and Beyond
179 expensing on fixed asset purchases is still accelerated for a 2011 audit in Redlands and surrounding areas with up to $500,000 with a 2 million phaseout threshold. Heavy SUVS still qualify for 2011 expensing also. While attractive tax deductions do not pay for assets. At a maximum 45% combined fed and state rate you still pay 55% of the cost from after tax dollars. Do not let deductions determine a decision.
Pension plans need to be set up before year end. Do not settle for a standard plan if greater deductions are needed or desired. There are a host of options in this area. Sometimes paying tax at a favorable rate can be a good strategy. Capital gains rates will go up and are now at historically low rates. Perfect timing is rarely achieved so paying low rates now could be your best bet.
Lastly health care tax credits are available for certain small companies with less than 25 employees and average wages paid below $50,000. This credit can be easily missed as it is new and restrictive. If the Obama health care act continues to go thru new medicare taxes will start in 2013 on investment income as well as income earners over 250k.