Year-end tax planning for small business

There are no time machines, so you can’t come back to today from the future. That’s one reason planning ahead is important — and why now is the time to think about what you can do before the end of the year to trim your business tax bill.

Here are three suggestions:

  1. Take advantage of energy incentives. Making energy-efficient improvements to commercial business property by December 31 can garner a federal tax deduction. The maximum deduction is $1.80 per square foot.

    A partial deduction is available for improvements such as interior lighting and hot water systems that meet certain energy-savings targets.

  2. Benefit from depreciation write-offs. Instead of waiting until January to upgrade computers or software, consider buying them now.

    For 2007, you can expense up to $125,000 of qualifying business assets. Though subject to limitations, the deduction is available whether you finance assets or buy them outright.

  3. Plan for retirement. Establish and fund a qualified retirement plan before December 31 and you might be eligible for federal tax credits in addition to a deduction from your business income.

    The credit for small employer pension plan startup costs reduces your tax liability by as much as $500 in each of the plan’s first three years.

    You may also qualify for the qualified retirement savings contributions credit on your personal return, which can save up to $1,000.

Other tax-saving strategies include hiring family members and paying year-end bonuses.  Additional ideas are at  We’ll be happy to help you maximize business tax benefits. Give us a call.


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Seattle CPAAbout Seattle CPA
Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has owned his own small business, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.

Huddleston Tax CPAs of Seattle & Bellevue
Certified Public Accountants Focused on Small Business

(800) 376-1785
40 Lake Bellevue Suite 100, Bellevue, WA 98005

Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching, Quickbooks consulting, bookkeeping, payroll and business valuation services for small business. We serve Seattle, Bellevue, Redmond, Tacoma, Everett, Kent, Kirkland, Bothell, Lynnwood, Mill Creek, Shoreline, Kenmore, Lake Forest Park, Mountlake Terrace, Renton, Tukwila, Federal Way, Burien, Seatac, Mercer Island, West Seattle, Auburn, Snohomish and Mukilteo. We have a few meeting locations. Call to meet John Huddleston, J.D., LL.M., CPA, Tawni Berg, CPA, Jennifer Zhou, CPA, Jessica Chisholm, CPA or Chuck McClure, CPA. Member WSCPA.