Hi There,

The first step to smart timing is to project your business’s income and expenses for 2015 and 2016. With this information in hand, you can determine the best year-end timing strategy for your business.

If you expect to be in the same or lower tax bracket in 2016, consider:

Deferring income to 2016. If your business uses the cash method of accounting, you can defer billing for your products or services. Or, if you use the accrual method, you can delay shipping products or delivering services.

Accelerating deductible expenses into 2015. If you’re a cash-basis taxpayer, you may make a state estimated tax payment before December 31, so you can deduct it this year rather than next. Both cash- and accrual-basis taxpayers can charge expenses on a credit card and deduct them in the year charged, regardless of when the credit card bill is paid.

If you expect to be in a higher tax bracket in 2016, accelerating income and deferring deductible expenses may save you more tax over the two-year period (though it will increase your 2015 tax liability).

For help projecting your income and expenses or for more ideas on how you can effectively time them, please contact us in Brea (714.990.1040) or Visalia (559.732.4135) or click the button below.

Beginning in 2016, large employers (those with 50 or more employees) must file Forms 1094 and 1095 to provide information to the IRS and plan participants about health coverage provided in the previous year. The forms are used by the IRS to enforce the Affordable Care Act’s (ACA’s) shared-responsibility (or “play or pay”) provision, as well as individual mandate and tax credit eligibility rules.

For employers and employees who do not comply with the ACA reporting regulations, penalties will be assessed and issued. Don't miss this opportunity to get your questions about ACA answered.