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Top 5 Year-End Tax Reminders

12.20.13

As the countdown begins to the end of 2013, it’s time to think about your current tax situation and potential tax strategies.

We’ve sent you our 2013 Tax Planing Guide that includes key tax law changes and opportunities.

And, we just wanted to remind you of five things that should be top of mind this time of year:

  1. Prepare for health care changes. The Small Business Health Care Tax Credit can help offset cost of coverage. Currently, the maximum credit is 35% of premiums paid for small business employers. The credit will increase to 50% in 2014. To qualify for this credit, companies must participate in the Small Business Health Options Program Marketplace.
  2. Take advantage of the capital purchase expensing under Sec. 179 and bonus depreciation, which was extended through 2013 by The American Taxpayer Relief Act of 2012. Currently, the tax break stands at $500,000 with a $2 million investment ceiling. For tax years beginning on or after January 1, 2014, the deduction decreases to $25,000 with a $200,000 investment ceiling. Stay tuned for any updates on whether Congress will extend the current rates into 2014 and beyond.
  3. Seek out the right tax-advantaged retirement plan for your organization. If you don’t have one, contact your BPM tax advisor, to start looking at the options. If you have one, make sure it is fully funded.
  4. Stay compliant with tax laws in each state you have a presence. If you sell products in more than one state your company is subject to tax withholding, filing, and payments in many of those jurisdictions. Ask your BPM tax advisor for assistance with planning and compliance in each state.
  5. Let us help you navigate final regs on deduction and capitalization of expenditures related to tangible property (commonly known as the repair and maintenance regulations). This will affect all taxpayers that acquire, produce, or improve tangible property. The new guidelines refine and simplify some of the rules and provide safe harbor amounts for capitalization of property and expensing materials and supplies. And, an important deadline is fast approaching to secure full benefits under this opportunity. While the new regs are effective for years starting on or after January 1, 2014, they may be adopted for earlier years under certain circumstances. In addition, every taxpayer who is affected by them will want to have an appropriate Capitalization Policy in place before year end. We have put together a sample policy for you to review. Note that taxpayers with Applicable Financial Statements, that is, audited financial statements (not reviewed or compiled financials unless required by a federal or state agency other than a bank) are permitted to elect up to $5,000 as a threshold amount for a minimum capitalization of tangible property. Please contact your BPM tax advisor for assistance.