With increases going into effect for corporations and many higher-income taxpayers, and continued uncertainty about  tax legislation, savings planning as part of your tax accounting strategy is more important than ever – but also more difficult. Driven by the recent uptick in the economy, many businesses and owners are seeing income levels increase, making them subject to more taxable income if tax exposure is not minimized.
All too often, Doeren Mayhew finds that individuals and businesses don’t use all the deductions, credits and other savings strategies because they are either unaware or unsure of how to take advantage of them. Be sure to take advantage of the personal and business breaks available this year, including:
As you get ready to file your 1040, remember that you may still be able to reduce your 2013 taxes by:

  • Contributing the full amount allowed to your traditional IRA, defined contribution plan or SEP.
  • Making sure you take all deductions, exemptions and credits you can.
  • Seeing if you would be better off filing jointly or separately, if married.
  • Determining if you’ll have to pay the alternative minimum tax (AMT) and what you can do to avoid or minimize it in 2014.

Business owners are very aware of how federal taxes eat into profitability. However, many companies focus on reducing their federal tax burden, paying less attention to their state and local taxes, which may actually offer more opportunities for savings. Tax strategies to reduce your total tax liability include:

  • Determining eligibility for special state and local tax credits. Many smaller companies are unaware of all the tax incentives that various governmental units offer.
  • Evaluating the business structure and activities for ways to reduce taxes at all levels. Often, a simple change in operating procedures translates into real tax savings.
  • Analyzing business assets to ensure distribution takes full advantage of changes in tax law and proven tax-reduction strategies.
  • Identifying steps such as timing equipment purchases and accelerating depreciation to further reduce tax liability.

For more ideas on ways to reduce your taxes, download our 2013-2014  Tax Planning Guide, contact Doeren Mayhew’s tax accounting specialists in Michigan, Houston or Ft. Lauderdale.