Bohemia, NY (PRWEB) December 28, 2013
Lawrence Teicher, founder of CFO Consulting Services, responds to an article published by Fox Business on December 6th, which explains the advantages of businesses working through December and reviewing their 2013 tax plans.
According to the Fox Business article titled “5 Ways to Reduce Your Business’s Year-End Tax Bill,” it is understandable that some business owners are not planning on looking over their tax bills this month, considering December is a time for gifts, holiday promotions, and planning for the new year. However, for businesses that set time aside for tax planning, there are five worthwhile ways to reduce tax bills.
The article says the first tip is to maximize the use of qualified plans, including 401(k)s and IRAs. The article states, “One of the maxims of tax planning is to defer tax for as long as possible to get yourself to a situation in which you are in a lower tax bracket when you begin to pull the funds out of the plan.”
The second tip is to align investment and tax strategies. The article says this is especially important if the business is nearing the net investment income tax threshold, a new tax that went into effect this year. Having a CPA and investment advisor review portfolios could help businesses dodge this tax.
Pulling cash out for capital gains or qualified dividends is another tip. The article says the rates imposed on capital gains and qualified dividends are significantly better than regular income-tax rates. If the business is a corporation, owners may be able to easily pass funds off as capital gains or qualified dividends.
The last two tips advise business owners to spread out gains across several years to keep the MAGI below the applicable threshold for imposition of the net investment income tax, and keep track of finances.
Lawrence Teicher, founder of CFO Consulting Services, a leading CFO Services provider, says all businesses should look into ways of reducing their year-end tax bills. “For a successful business, taxes can be one of the largest expense items.. Any chance to reduce the business tax burden should be taken advantage of by small business owners, no matter the time of year.”
Teicher says that the end of the year is a great time to consult a financial advisor. “There are a lot of tax breaks and methods of reducing tax bills that business owners may not know about,” he says. “Qualified advisors can help businesses save money by claiming these breaks. However, business owners must make sure that the CPA or the advisor they use is constantly thinking about their company, the latest tax rules and the best way to manage its finances.”
CFO Consulting Services, LLC provides outsourced, part-time CFO services on an as-needed basis to both small and mid-sized businesses located in the NY metropolitan region. Founded by Long Island CPA and financial expert Lawrence Teicher, CFO Consulting Services follows four main principles: independence, objectivity, competence and confidentiality. These core values have led its clients to achieve lasting success in their businesses.