Remember, tax planning occurs before 12/31, not during tax season
Read below for some very important tax savings tips that my accountant recommends exclusively for Optometrists/health care professionals.
(1) Delay billing for work done late in the year so that payment will be received in the following year (as long as you do not jeopardize your cash flow)
(2) Purchase fixed assets and claim a portion of depreciation immediately.
- Section 179 Tax Deduction Limits is now $1,000,000 for 2019. This means businesses can deduct the full cost of equipment from their 2019 taxes, up to $1,000,000.
(3) If you have an account receivable with a customer who is unlikely to pay, then you might be able to write this off as an noncollectable debt.
- Also known as a Bad Debt Deduction.
(4) Maximize your retirement contribution.
(5) Accelerate business expenses – pay bills now that are not due until January 2020 of next year. (If you have enough cash flow)
(6) If your cash flow is strong, and if necessary, think about fixing/repairing/making improvements in your office and/or your rental properties.
(7) Empty your office or home of old stuff such as furniture, equipment, clothes, household items, etc. Remember to keep receipts for those donated items.
(8) Give out bonuses to qualified employees.
(9) If you have big capital gains (selling equity or stocks), try to sell those worthless stocks or equities before year end to offset against capital gains.
(10) Set up a 529 plan (college fund) for your kids.
- If you need to pay a 1099 form to people (I.e. family members) for their services, please plan ahead.
- Purchase Electric Vehicle, install solar panels on your residence, equipment use for disabled, etc. - Optometric equipment such as the ICare qualifies for the ADA Tax Credit!
- Miscellaneous expenses related to travel, CE, lodging, meals and etc. (Also apply for travel/research/educational expenses related to rental properties.)