The last few days of 2011 can be critical for business owners to take advantage of year-end tax planning options. MetLife suggests three areas in the current tax environment that are worthwhile for business owners to consider before the new year rings in and for 2012.
1. Pay Bonuses in 2012, but Deduct Them In 2011
The IRS' Revenue Ruling 2011-29 allows an employer who uses the accrual method of accounting to deduct a fixed dollar amount of bonuses in the current tax year even though the bonuses are not paid out until 2012.
MetLife notes that employers may deduct the expected bonuses even though they may not know until after year-end which employees will receive bonuses or the actual amount of any individual bonus. Doing this can give business owners much more flexibility in formulating their year-end tax and profit goals, salary deferral plans and nonqualified deferred compensation plans.
2. Take Advantage of 2011 Bonus Depreciation and Expense Limits
