Let’s talk last minute tax savings.
Happy New Year!
It’s about 4:30 Eastern time on December 31st, 2020 which means, I have Seven and a half hours to figure out any last minute tax savings.
Like most of you, I do most of my transactions electronically, but I do keep a checkbook handy for this purpose. If you write the check today and stick it in the mailbox, you can take the expense and deduction in 2020. But if you go and do an online bill pay, it won’t process for a few days.
Even better, if you use your Credit Card, it will have a transaction date of December 31st, 2020, so it will be dated today.
So what are some last minute deductions you can do?
Most charities are thrilled to get a check or credit card donation, and they know the drill. When they get the 12/31 dated check next week, they’ll know to put it on the 2020 donation letter.
Purchase equipment you can put in service today with bonus depreciation. Now would not be the time to order a computer on Amazon, as you can’t put it in service today. But you could go to Best Buy, which is open until 7 PM, so if you pick up anything you need, just make sure you set it up and use it in your business before midnight, and it’s deductible today.
In fact, you could go out, purchase a car in the next few hours, and use it 100% for business. If you do that, take a photo of your odometer when you get it, use it ONLY for business, and take a photo of your odometer when you finish. The IRS will look at the percentage of the car’s usage, by miles, so if you only drive 5 miles in 2020, and it’s to the bank for your business, you’re at 100% deduction up to $18,100 this year, for new or new-to-you vehicles.
If you are using SaaS subscription services, now might be a great time to prepay for the year, taking the deduction in 2020.
If you haven’t maxed out your Business Retirement Contributions, go run an Off Cycle Paycheck today, setting your contribution to 100%. It will take out payroll taxes, but you can get about 91% of the money in, and drop that check in the mail.
Now, if you need deductions but don’t get them done today, certain things have until April 15th, like IRA and HSA Contributions.
So let’s finalize our last minute 2020 financial maneuvers, finish strong, and in about 7 and a half hours, start working on our 2021 finances.
Let’s agree to make 2021 the year we really get our financial house in order. Schedule a call with me at BetteHochberger.com, and let’s discuss how we can help you level up your business and your wealth.