Year-End Tax Strategies

Hello Everyone!

October is a perfect time to start having conversations (if you have not already) with your CPA or tax planner to determine what your Year-End liability is projected to look like and make adjustments if needed. In this month’s newsletter, we will focus on some important tax information from Wise Tax Consultant LLC.

Many Business Owners find themselves needing to reduce taxes significantly, and, if the business owns real estate, there may be a way to increase the depreciation schedule of the property in the short term, which of course would increase non-cash expenses, and as a result lower net income and the overall businesses tax liability. If your business owns real estate, you may want to explore the option of an accelerated depreciation expense via a Cost Segregation Study of real estate owned by the business.

What is a Cost Segregation Study?

A cost segregation study is a strategic tax planning tool that accelerates the depreciation of certain components of your rental property. By identifying and reclassifying these components, you can enjoy substantial tax benefits, putting more money back in your pocket.

Key Benefits for Landlords:

1. Increased Cash Flow: By front-loading depreciation, you can reduce your taxable income, resulting in lower tax payments and increased cash flow for property reinvestment.

2. Faster ROI: Shortening the depreciation schedule means faster returns on your investment, helping you achieve your financial goals sooner.

3. Improved Property Valuation: Enhance your property’s valuation, making it more attractive to potential buyers or investors.

4. Comprehensive Compliance: Ensure your tax strategy complies with IRS regulations while maximizing deductions.

Wise Tax Consultants has a proven track record of delivering exceptional results and can handle the entire Cost Segregation Study process from start to finish. If you’d like more information on this topic please feel free to reach out to us. Or you can reach out to Paula Nelson Wise directly at Wise Tax Consultant LLC Phone: (804) 390-9915

With a volatile election season occurring in the 4th quarter of this year and generally declining economic trends, it is very important to have a solid strategy between now and YE to bolster cash reserves and ensure your business is as healthy as possible. It is often during times like this that small businesses experience an increase in financial fraud, so it is imperative to have sound checks and balances in your business to mitigate this risk. Most financial fraud occurs when three things are present:

  1. Rationalization of the fraud by an employee
  2. Pressure (a need for additional money by the employee)
  3. Perceived Opportunity (lack of financial control and checks and balances in the business)

While each business is unique, there are some foundational risk mitigation strategies that can be put in place in all businesses. Working to reduce or eliminate the perceived opportunities that encourage fraud is the best place to start. Here are some examples of business fraud:

  • One Individual Performing the Entire Financial Accounting and Payment Process with No Checks and Balances
  • Employees See Owners/Spouses Skimming from the Company Cash Drawer
  • No Expectations Communicated For Honesty – Company Culture
  • No Fraud Training for Employees, or Expectation/Method to Report Fraud
  • No Periodic Outside Review to Catch Potential Embezzlement
  • Most Financial Fraud Occurs from the Trusted/Hardworking Employee who rarely takes a significant vacation.
  • If you would like to discuss financial fraud mitigation further, please reach out to us at P&L Business Solutions at (804) 561-1600.

P&L Business Solutions

www.PandLBusiness.com

(804) 561-1600

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