As 2015 quickly comes to a close, South Dakota businesses are once again facing uncertainty as Congress has yet to act on a number of important tax laws that expired at the end of 2014.
Although these temporary tax provisions have been routinely extended, the possibility that Congress could let them remain expired leaves taxpayers in limbo as to how to properly plan. However, there are still a number of actions that can be taken to save tax dollars in 2015.
1. Buy machinery and equipment before year-end. Under the generally applicable “half-year convention,” businesses can secure a half-year’s worth of depreciation deductions in 2015.
2. Consider accelerating income from 2016 to 2015 if your business will be in a higher bracket next year. Alternatively, a business should consider deferring income until 2016 if it will be in a higher bracket this year.
3. Consider deferring a debt-cancellation event until 2016 to reduce 2015 taxable income.
4. Consider disposing of a passive activity in 2015 to reduce taxable income if doing so will allow you to deduct suspended passive activity losses.
5. If you own an interest in a partnership or S corporation, consider whether you need to increase your basis in the entity so you can deduct a loss from it for this year.
