Home Business Watch out — too much tax deferral can backfire on small business...

Watch out — too much tax deferral can backfire on small business owners


According to conventional wisdom, deferring federal income bills is “always a good idea.” But conventional wisdom is not always right.

To be sure, tax deferral will be beneficial if you turn out to be in the same or lower tax brackets in future years. In that case, making moves that lower current-year taxable income will at least put off the tax day of reckoning and give you more cash to work with until the bill comes due. If tax rates turn out to be lower in future years, so much the better. Deferring taxable income into those years will cause deferred amounts to be taxed lower rates. Terrific! But is it reasonable to believe that lower tax rates are in the cards? Probably not. Let’s discuss.

Small business owner tax deferral opportunities

If you’re a small business owner who operates using a sole proprietorship, partnership, LLC treated as a sole proprietorship or partnership for tax purposes, or S corporation, you have multiple…

Click here for full article…www.marketwatch.com