We hope you’re having a fantastic holiday season!

As accountants, the end-of-year season is a busy one. With the wrap-up of financial statements, last-minute tax deductions, and preparation for next year, it’s likely our heads will be spinning well into next year. And not because of the eggnog!

As a business owner, we imagine that you’re feeling the same.

To help, we’ve rounded up some of the most important tax-saving strategies that can help you save money both personally and professionally as we head into 2023.

Let’s dive in.

Are you a business owner?

Make sure you cross these tax deductions & credits off of your to-do list!

As always, we recommend working with an experienced business accountant to ensure you’ve saved every last penny.

1. Income deferral / deduction acceleration

If you’re a cash basis taxpayer, and nearing the 24% tax bracket, you may want to push your income into a lower tax bracket by deferring income to the next year.

You can do that by:

• Avoid trying to collect delinquent accounts until the year flips over
• Ask for smaller payment for projects that span over this year and next year
• Send out December invoices after Jan 1st

In addition, accelerating your deductions can further boost your tax savings this year.

If you’re planning on buying computers, equipment, or new vehicles, try to do that before December 31. Your assets are depreciating over multiple years – or you can write off the cost immediately by utilizing section 179.

Section 179 allows you to deduct up to $1.08M of new and used assets this year.

2. Modified tax credit for plug-in vehicles

New and used electric vehicle cars that are purchased in 2022 can qualify for the EV tax credit.

Even if your purchase was placed in 2022, and delivered in 2023, you still can claim the credit!

For electric vehicles placed in service after December 31, 2022, the Inflation Reduction Act extends the (up to) $7500 credit to 10 years.

Note: the EV tax credit applies to any “clean vehicle.” So, a hydrogen fuel cell car, for example, or a plug-in hybrid vehicle with 4-7 kilowatt hours of battery capacity, could qualify.

The credit has some income limitations so be sure to work with your experienced business accountant for help.

3. Residential clean energy credit

If you spent money to reduce your energy bill this year, you may be entitled to a tax credit.

This tax credit is referred to as the “Solar Credit”

The full 30% credit has been reinstated in 2022, and is available for qualified expenditures (including solar electric, solar water heating, fuel cell, etc.).

The credit is available to personal-use property only, such as your primary residence and vacation home.

4. Student loan debt relief

If you have a student loan, you may qualify for loan forgiveness of up to $20K under President Biden’s student loan debt relief plan.

The relief is limited to individuals with an income of less than $125K ($250K if Married Filing Jointly). Private student loans don’t qualify.

Most borrowers will automatically receive the forgiveness based on their income date on file with the department of education.

Please Note: Courts have issued orders blocking this program, you can check the status here.

5. New energy efficient home credit

This credit is available to contractors or manufacturers that construct or rehabilitate new energy efficient homes acquired before January 1, 2033.

The 2022 credit is limited to $1000 and $2000. For homes purchased after 2022, the credit increases to $2500 for single family homes, and $5000 for zero-energy ready homes.

6. IRS Automatic penalty abatement for failure-to-file 2019 and 2020 return

If you failed to file your 2019 or 2020 tax returns, you may qualify for automatic penalty relief as long as you file your returns by September 30, 2022.

The IRS began sending notices to qualified taxpayers throughout 2022, and no action on your part is required.

Failure to pay penalty is not eligible, and the relief applies to individuals and business taxpayers.

Need Help Saving Money This Year?

We strongly recommend getting the help of an experienced business accountant to help you save the most money as legally possible in your business and personal finances.

If you don’t currently have an accountant that you’re happy with – or maybe you just need a change! – we’re always here to help.

You can book a free 15-minute call with us to see how we can help your unique situation.

If it’s not a good fit, we’ll point you in the direction of someone who is!

Use our simply online calendar to book your free call.

Until next time!