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As the end of the year approaches, it's time to identify tax planning moves you

With proper planning, you may be able to pass business losses through to your personal tax return - and use them to offset income from other sources.

should make before December 31st. The first step in the process is to make a projection of this year's income, along with expected tax deductions and tax credits. With the projection in hand, we can advise you how various year-end planning strategies will affect your tax bill.

For example, if the projection shows you will have a taxable loss from your S corporation, you may need to inject some cash into the company in order to have sufficient basis to deduct the entire loss on this year's return. Reason: S corporation shareholders cannot deduct corporate losses that exceed their "basis" in the stock they own. Basis is equal to the amount of your investment in the company, with some adjustments.
 
By taking the necessary steps now, you can reduce your tax bill. If you wait until it's time to prepare your tax return, it will be too late.

The first step involves putting together a projection that shows your current tax situation. Contact Small Business Manager Jim Gante, CPA or Tax Specialist Crystal Martin at 717-757-6999 or 800-745-8233. We're ready to help.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC. Geneos Wealth Management, Inc is not affiliated with Stambaugh Ness.