USS Accounting, LLC

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Helpful 2020 year-end tax tips: What we do know and what we should know While having all receipts organized continues to be important, this year also has shown us that business can’t go on as usual when something very unusual is going on. With that in mind, below is a list of the obvious and not so obvious year-end tax tips to consider as you prepare for the new year. 1 Shop this year for next year Whatever you plan to spend next year, try, and buy as much as you can now, b...efore Dec. 31. That is because any business purchase completed before the end of the year will give you a 100 percent deduction on the cost of the items. 2 Defer or accelerate your income Deferring income, pushing income that could be collected this year into next year, should be recommended when it is believed that next year’s tax rate will be lower. Accelerating income means trying to collect all possible income before Dec. 31, 2020, instead of in 2021. Recommend this if the company expects to make more money in the next year so they will be taxed now in a lower bracket. 3 Add children to the payroll W-2 wages paid by the parent to the parent’s minor child, for work done through sole proprietor or partnership business, are tax deductible and exempt from federal payroll taxes for both the parent and the child. If you or any of your clients operate your business as a sole proprietorship, or as a partnership, you will face no federal payroll taxes on the W-2 wages you pay your minor child. Pay reasonable wages, track the tasks through timesheets and document their works thoroughly. 4 Hire spouses Love alone will not reap tax benefits but paying your spouse through official channels will! All the time and effort that your spouse puts into your business should be compensated by paying them a salary and contributing the maximum amount allowable to a 401(k), including an employer match. An annual salary of $21,500 would result in zero incremental taxes, after maxing out his or her 401(k). 5 Buy that new car or truck A vehicle purchase can also earn you major deductions and tax benefits in 2020. If a company buys and places in service a new or used SUV or crossover vehicle that the manufacturer classifies as a truck and has a gross vehicle weight rating (GVWR) of 6,001 pounds or more, you may receive these big benefits: the ability to elect bonus depreciation of 100 percent; ability to select Section 179 expenses of up to $25,900; MACRS depreciation using the five-year table; and no luxury limits on vehicle depreciation deductions. It is important to note that bonus depreciation applies to both new and used property With the close of 2020 just a few weeks away, you still have time to reduce your tax bill. Most importantly, remember the cost of our bookkeeping services and any tax preparation services are deductible too! Contact USS today! We can help get you ready for your 2020 taxes. www.ussaccounting.com

Let's talk Cash Flow! For small businesses everywhere it is of the utmost importance that you know where your money has gone each month. If you don't know where you are spending, then you don't know where or in what areas you can cut back on costs, or if you even have enough money to successfully run your business. Did you know, 82% of small businesses fail because of cash flow problems? ( score.org) Cash flow is a blanket term; there are so many factors that add into it. Bu...t do you know where your business stands with your cash flow? Did you flinch when I asked the question? If so, contact USS today! Let's get started helping you succeed and thrive! Especially in these trying times. www.ussaccounting.com

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