It was a very difficult year, but many businesses in GA still improved their bottom line in 2021. People forget that when the economy goes down there is also a direct correlation to lives lost.
December is the month to get some of the biggest (and the most fun) deductions. We have until 12/31 as the deadline. Self-employed retirement accounts can be contributed for the 2021 year, up to the extension date.
If your business has a good amount of cash, and your net profit percentage is higher than 10%, it can be wise to consider these potential deductions:
- Get a Section 179 for Vehicles: A vehicle over 6,000 pounds can be deducted 100%.
- Purchase new office furniture, buy a nice artist painting for your office, or buy a new mounted TV for your office and conference room.
- Contribute to a self-employed retirement account, several different types, Solo 401k, SEP IRA, safe harbor 401k.
- Buy a rental property, preferably a beach rental! These puppies are producing some serious cash flow. Make sure you have a LLC, EIN, and that you are taking depreciation expense each year, buying a roof is expensed and not capitalized. (Great success!) Did you know you can do a Cost Segregation Study on your beach rental and get a huge deduction?
- Plan to finish 2021 with a higher W2 for your business so you can more easily qualify for that beach rental or commercial property. Life is just so much easier for a business owner when on a somewhat high W2, quarterly estimated tax payments are a pain.
- Buy GA low-income housing credits to save 10% on GA taxes, GA film tax credits have a serious shortage.
- Gift someone under $14,000 and you do not have to file a gift tax return. Neither party owes tax.
- Start investing in something you like, enjoy, and has intrinsic value doing as a hobby (Cryptocurrency, Trading account at major broker, Gold/Silver coins/bullion).
- Buy a commercial property and then have a cost segregation study performed.
- One of the best investments for anyone is spending more on advertising and marketing for your business.
- And for pete’s sake, if your net income is not 10% of your sales and your business is running well, raise your prices!