Strategies For Tax Efficiency

Why wait years to write off equipment when you can expense millions today? If you’re running a business, cash flow is everything. Waiting years to write off equipment or software isn’t just frustrating, it slows growth. That’s why Section 179 has always been powerful. What Changed in 2025: Section 179 expensing limit is now $𝟮.𝟱 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗽𝗲𝗿 𝘆𝗲𝗮𝗿, the highest ever. That means small and midsize businesses can immediately deduct the cost of new equipment, office tech, vehicles (that qualify), and even software. Why It Matters: 1. 𝗙𝗿𝗼𝗻𝘁-𝗹𝗼𝗮𝗱 𝘀𝗮𝘃𝗶𝗻𝗴𝘀 If your income is strong this year or rates are expected to rise, taking the full deduction now maximizes your tax break. 2. 𝗕𝗼𝗼𝘀𝘁 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 Immediate expensing frees up working capital you can reinvest into hiring, scaling, or new technology. 3. 𝗦𝗺𝗮𝗹𝗹 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲 The higher cap is especially valuable for businesses that need large equipment upgrades but couldn’t fully expense them before. 4. 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗺𝗶𝘅 You can combine Section 179 with bonus depreciation (also permanent under the OBBBA) for even more powerful tax planning.     Key Things to Remember: • The property must be placed in service this year, not just purchased. • Section 179 cannot exceed taxable business income (excess carries forward). • States don’t always follow federal rules, so check your state conformity. • If you stop using the property mostly for business, some deduction may be recaptured.    📌 Before making major purchases, coordinate with your CPA to maximize the deduction and avoid surprises.

My 3 favourite VAT tips that can save many businesses tens of thousands of £ 👇🏻👇🏻👇🏻 1) if you get charged VAT on rent as you don’t own your premises and you’re an exempt or partially exempt business, ask your Landlord if they opted to tax their properties more than 20 years ago If so, they can almost certainly revoke the option so that any further rent payments will be exempt from VAT (which for exempt or partially exempt businesses is a cost) The Landord may lose their entitlement to recover VAT on property related expenses, but you can in exchange accept a rent increase, which can be higher than the Landlord’s expected loss on input tax but lower than the VAT you will no longer get charged 😉 2) if your business is constantly in a repayable position (when input tax exceeds output tax) you can request HMRC to submit VAT returns every month rather than quarterly HMRC normally allows a business that regularly submits repayment VAT returns - like most exporters - to file monthly This will in turn allow these businesses to cash in refunds much more quickly with considerable working capital/cash flow benefits 🤑 3) if you’re not registered for VAT because all or the vast majority of your supplies are outside the scope of UK VAT but would have been taxable if supplied domestically, you can voluntarily register, start recovering VAT on your costs as input tax and continue NOT to charge VAT on your outside the scope sales! This is a scenario many service providers with overseas business clients may find themselves into If they voluntarily register suddenly VAT incurred on their expenses will no longer hit their PL! 😀 #vat #uktax #indirecttaxes

Running a business can be one of the most powerful wealth building and tax planning tools available But only if you do it right I see the same early mistakes over and over, even from very successful business owners If you want to set yourself up correctly from Day 1 (or fix it before it gets expensive), here’s what matters most 👇 1. Get your entity election right This is foundational. The right structure can dramatically reduce taxes and expand planning opportunities The wrong one can mean: - Unnecessary self-employment taxes - No access to PTET - Reduced or eliminated QBID - Limited retirement contribution options - No QSBS - Less tax efficient for reinvesting and growing the business This decision should be proactive and can change as your business evolves 2. Keep business and personal finances completely separate Commingling accounts is one of the most common and costly mistakes It can: - Create audit risk - Destroy LLC liability protection - Turn tax prep into a nightmare - Cost you far more in professional fees and your time Clean separation from Day 1 saves money, time, and stress. 3. Track all your expenses Most business owners leave money on the table simply because they don’t track well Good tracking: - Maximizes legitimate deductions - Makes tax planning actually work - Gives you clarity on real cash flow The easiest time to do this is before the business gets “busy.” 4. Save for taxes monthly This is non-negotiable I see too many high-income business owners fall behind, then have to scramble to make things work Treat taxes like a fixed expense, not a surprise This is a huge reason we give clients new tax updates at every call 5. Understand safe harbor taxes and pay your estimates Underpayment penalties are completely avoidable. You need to Know: - Your safe harbor number - Your quarterly payment schedule - What you will get in from withholding - How income volatility affects estimates If you don’t know these numbers, you’re guessing And guessing is expensive 6. Do real tax planning 2–3x per year (not just in April) One of the biggest advantages of business ownership is tax flexibility But it only works if you plan: - Mid-year - Again in Q3 - Then finalize in December Tax planning is proactive. Tax prep is reactive 7. Setup the right retirement accounts Set up the right retirement accounts Not all retirement plans are created equal. In most cases: - Solo 401(k) > SEP IRA - 401(k) > SEP IRA and Simple's The wrong setup can cost you tens of thousands per year in missed contributions And limit Roth strategies Owning a business gives you incredible leverage... if it’s structured correctly But I see so many overpaying in taxes because they do not invest in tax planning

These co-owners just saved $20,000 using a tax structure most CPAs have never heard of. One partner lives in California, the other in New York. The California-based owner wanted S-Corp tax treatment for payroll tax savings. But the New York owner wanted to stay as an LLC to avoid NYC's additional S-Corp taxes. Most advisors would force them into the same structure. And someone loses. So here's what we did instead: Set up the operating company as a partnership. Each owner holds their interest through their own LLC. California LLC elects S-Corp status. New York LLC doesn't. The result: • California gets payroll tax savings • New York avoids extra city taxes • Both set up solo 401(k)s • Both optimize for their specific situation The partnership distributes profits normally. Each owner's LLC handles their preferred tax treatment. Most CPAs know about S-Corps. They know about partnerships. But they don't know you can stack them this way. If you’re in a tricky situation like this one, let’s chat!

I run a 1-person business in California If I did no tax planning/strategy I'd owe $260K+ in taxes between federal, state, and self-employment taxes Here's every move I make (and why): 1 - LLC that elects to be taxed as an S Corp. By electing S corp I pay self-employment taxes (payroll) on the reasonable salary I set up myself instead of all of my earnings. Example: $150K salary and $450K in distributions saves about $19.5K in self-employment taxes. Every. Single. Year. 2 - Maximize the QBI deduction. I get a $0 QBI deduction since I am a SSTB (specified service trade or business) but I'm putting it here since so many people miss this. I wouldn't want the lowest possible reasonable salary since I'd miss a good chunk of QBI deductions and it could be seen as unreasonable. I also don't want a salary that is too high or I'd pay too much in payroll tax. The goal is to find the sweet spot. Example: $60K salary is a $30K QBI deduction instead of a $75K QBI deduction on a $150K salary for non-SSTBs at this income level. Big difference. Plus the low salary limits how much I can put into a solo 401K 3 - Solo 401K. This is an easy one and I talk about this way too much. Please don't use a SEP IRA. I could use this to get a $61K tax deferral but I prefer to use this for after-tax contributions rolled to my Roth IRA. This gives me liquidity and access to every dollar I put in tax-free and penalty-free anytime (not locked up till 59.5) and it'll add up to millions in future tax savings by avoiding 28.1% capital gains tax (15% long-term capital gains tax, 9.3% California, and 3.8% net investment income tax) 4 - Pay CA state income taxes through my business. If I pay state taxes on my personal return, I am limited to a $40K tax deduction because of the SALT cap (this was recently raised from $10K thanks to the One Big Beautiful Bill). This used to save me $10K - $15K/year before the new tax law and it's not much of a savings anymore, maybe a few thousand, but it lets me pay business taxes with a business credit card. Aka get welcome offers and travel for free. Just booked a $10K trip for 45,000 Hyatt points/night which were transferred from Chase 5 - Track expenses and keep good books. It's not about being perfect here but bad books = wasted money. All business-related stuff goes on a business card and then an accountable plan is used to reimburse myself for my home office, % of utilities, vehicle, etc Then some other things I do/will do that add up: - Backdoor Roth - HSA - Hire kids to spread the income to 0% tax brackets and do custodial Roths - 529 plans, minimal but some to get up to the $35K # that can be rolled to a Roth - Trump accounts to mega backdoor $ into my kids' Roth IRAs - Automate and not mess up my plan by being a human (picking stocks, selling, trying to time markets, etc) - Direct indexing - Cash in California municipals or US treasuries for a higher tax-equivalent yield - Asset location

Tax is not what kills small businesses, but poor tax planning does. Every year, thousands of small businesses bleed money in taxes. All because they scramble to plan only in March, instead of from Day 1. Here’s a super practical, updated guide for every entrepreneur, founder, and small business owner. ➡️ Choose the right tax regime - From FY 2023-24, the new tax regime is the default. - New regime: Lower slab rates, but fewer deductions. - Old regime: Higher slab rates, but you can claim deductions like Section 80C, 80D, home loan interest, etc. Tip: Use an income-tax calculator before the year starts to see which works best. ➡️ Register under the Composition Scheme (if eligible) - If you’re a GST-registered trader, manufacturer, or small service provider: Turnover ≤ ₹1.5 crore (₹75 lakh in some cases) - Pay tax at a flat rate (1%/5%/6%) without worrying about input credits. This simplifies compliance and saves costs. ➡️ Claim depreciation smartly - Buy machinery, laptops, and office equipment before March 31 to claim depreciation this year. - Know about additional depreciation if you’re a manufacturer. This can significantly reduce taxable profits. ➡️ Use presumptive taxation (Sections 44AD, 44ADA, 44AE) - For businesses with turnover ≤ ₹3 crore: Deem profit @ 6% (digital) / 8% (cash). - For professionals (CA, doctors, designers, etc.) with receipts ≤ ₹75 lakh: Deem profit @ 50%. This avoids maintaining detailed books and audits. ➡️ Pay the advance tax in time - Missing advance tax = interest under Sections 234B & 234C. - Set reminders: June 15, Sep 15, Dec 15, Mar 15. ➡️ Deduct at source (TDS) correctly - Wrong or missed TDS will lead to penalties & disallowance of expenses under Section 40(a)(is). Pro tip: Automate TDS payments & filings. ➡️ Plan salary vs. dividend vs. bonus (for private limited companies & LLPs) - Salaries & bonuses are tax-deductible. - Dividends are taxable in shareholders’ hands, but may still be efficient. Discuss with a CA to design the right payout mix. ➡️ Don’t miss these deductions: - Rent paid for business premises. - Interest on business loans. - Insurance premiums (for employees or assets). - R&D expenditure (100% deduction in many cases). - Marketing & website expenses. ➡️ Use digital payments - Section 44AB prohibits cash expenses > ₹10,000 per day per vendor. - Use UPI, IMPS, and NEFT, and you also stay audit-compliant. ➡️ File on time - Avoid late fees (Section 234F) & get faster refunds. Tax planning is a 12-month exercise, not a March 31 ritual. - Talk to your CA or tax advisor now, plan your year, and reinvest the savings to grow your business. Follow Dwipa Shah for more insights like this. At AND Fintech, we help you invest smart, clear, and confidently, with transparent strategies and ethical advice that build a solid financial future. Send a Hi on WhatsApp +91 7700935025 or Email at Info@andfintech.in Visit our website: https://andfintech.in/ 

1/ It’s Sunday night, and you’re catching up on tax law (just me?). Let’s talk about two powerful tools saving business owners serious money: bonus depreciation and Section 179 expensing. If you’re making big purchases, this thread is for you 👇 2/ Picture this: A manufacturer spends $800K on equipment. Before 2017, they’d spread out deductions over years. After the Tax Cuts and Jobs Act (TCJA)? They wrote off all $800K in year one. That’s a massive cash flow boost. 3/ Another client—a landscaper—invested $1.2M in trucks and tools. Section 179 allowed them to deduct $1M upfront. The tax savings freed up cash to hire five new employees. Tax strategy isn’t just about numbers—it’s about driving growth. 4/ Here’s how it works: Bonus Depreciation lets you deduct up to 100% of eligible property costs in year one (phasing out after 2023). Section 179 Expensing allows up to $1M in immediate deductions, with a phase-out starting at $2.5M. 5/ Bonus depreciation used to apply only to new property. The TCJA changed that. Now, used property qualifies too. Machinery, vehicles, office furniture—if it’s tangible and used for business, it might be eligible. 6/ Example: A retail business spent $600K on storefront improvements—new HVAC, security systems, and a roof. Under Section 179, they deducted the entire amount in year one. Before the TCJA, they’d be waiting decades for that tax break. 7/ Timing matters. 100% bonus depreciation is already phasing out: • 2023: 80% • 2024: 60% • 2025: 40% It’s gone by 2027 unless Congress extends it. Planning a big investment? The time to act is now. 8/ Bonus depreciation is automatic unless you opt out. Section 179 requires an election. Bonus can push you into a net operating loss. Section 179 can’t. Both are powerful tools, but the best choice depends on your goals. 9/ In M&A, this can be a game-changer. Buyers want to allocate purchase prices to tangible assets eligible for bonus depreciation. Sellers, however, often prefer allocations to goodwill to avoid immediate tax hits. 10/ One deal we worked on allocated $1.5M to machinery, giving the buyer an immediate deduction. The seller? They negotiated a premium to offset their higher tax bill. Smart structuring creates win-wins. 11/ Tax law isn’t just compliance—it’s strategy. Bonus depreciation and Section 179 can supercharge your cash flow. But they’re complex. The wrong move can leave money on the table—or worse, cost you. 12/ If you’re buying equipment, making improvements, or closing deals, these tools can save you big. Consult your advisor to see how they apply to you—or DM me if you want to talk strategy. 13/ Disclaimer: This thread is for informational purposes only. It’s not tax, legal, or financial advice. Always consult your advisors to determine what works best for your situation. I’m not your attorney. Blah blah blah… / end

Most business owners focus on revenue growth. But tax strategies can unlock hidden cash flow just as powerfully. The reality? 🚫 Ignoring deductions leaves money on the table 🚫 Poor retirement or depreciation planning slows wealth building 🚫 Mismanaged property swaps or credits create unnecessary taxes 🚫 Business structure choices impact take-home profits 🚫 Delayed action means missed opportunities Here are 8 ways to grow cash flow with tax strategies: 1. Deduct Expenses Strategically ↬ Track and categorize monthly for maximum deductions ↬ Reduces taxable income, keeps more cash in the business 2. Use Retirement Plans Wisely ↬ Maximize 401(k) or IRA contributions ↬ Defers taxes while building long-term security 3. Leverage Depreciation ↬ Apply accelerated methods for property and equipment ↬ Reduces yearly liability, encourages reinvestment 4. Explore 1031 Exchanges ↬ Swap investment properties tax-deferred ↬ Avoid immediate capital gains, free up more investment cash 5. Utilize Tax Credits ↬ Research and apply eligible incentives annually ↬ Lowers tax bill and encourages smart business practices 6. Structure Business Strategically ↬ LLC vs. S-Corp choices affect taxes ↬ Potentially lower self-employment taxes, separate personal and business income 7. Time Income and Expenses ↬ Delay income, accelerate deductible spending ↬ Smooth taxable fluctuations, optimize cash flow 8. Consider Green Incentives ↬ Invest in energy-efficient assets for credits ↬ Reduces taxes immediately while supporting sustainability The best cash flow growth isn’t just about revenue. Strategic tax planning puts more money in your hands. Which of these strategies could boost your cash flow this year? Follow me Marc Henn for more. We want to help you Retire Early, Supercharge Your Cash Flow, and Minimize Taxes. Marc Henn is a licensed Investment Adviser with Harvest Financial Advisors, a registered entity with the U. S. Securities and Exchange Commission.

Most small business owners overpay tax not because tax is high, but because they file blindly. They rush to file. They panic close to deadline. They accept whatever number appears on the tax return. Tax authorities love unprepared taxpayers. Here are practical, legal tax realities every small business owner should understand before filing. 1. Profit is not the same as taxable profit Your business profit and taxable profit are not twins. Many expenses reduce taxable profit even though they do not reduce cash today. Depreciation. Capital allowances. Bad debt provisions. If you do not understand this, you will pay tax on money you never truly earned. 2. Separate personal and business expenses properly Many business owners mix everything together. Phone bills. Fuel. Internet. Rent. Subscriptions. If it is used for business, part or all of it may be deductible. But if your records are messy, you lose the deduction. Clean records reduce tax. Confused records increase tax. 3. Timing can save you money When you earn income matters. When you record expenses matters. Delaying income legally. Accelerating allowable expenses before year end. This simple timing strategy can shift tax without breaking any rule. Tax is not only about how much you make. It is about when it is recognized. 4. Many small assets should not be expensed immediately Buying equipment and expensing everything at once can be a mistake. Some assets qualify for capital allowance. This spreads tax relief across years and can reduce future tax pressure. Good tax planning thinks ahead, not just today. 5. Bad debts can reduce your tax bill If customers owe you and the debt is truly uncollectible, you should not pay tax on that income. Many small businesses pay tax on money they never received because they failed to treat bad debts correctly. That is avoidable. 6. Your business structure affects your tax Sole proprietor. Partnership. Limited company. Each structure has different tax consequences. What saved you tax two years ago may now be costing you more. Tax structure should grow with your business. 7. Cash flow must be considered before filing Tax payable on paper can destroy cash flow in reality. Smart business owners plan tax payments alongside rent, salaries, and inventory needs. Tax planning is cash planning. 8. Filing late is one of the most expensive mistakes Penalties. Interest. Unnecessary stress. Late filing often costs more than the tax itself. Preparation beats apology. The biggest truth Tax is not something you solve at filing time. It is something you manage throughout the year. The earlier you plan, the less you panic. The better your records, the lower your tax risk.

Here are some tax saving strategies for the USA Businesses (#TY2024): 1. Maximize Section 179 Deductions: - Deduct the full cost of qualifying equipment and software purchased or financed during the tax year. For 2024, the deduction limit is $1,160,000, with a phase-out threshold of $2,890,000. 2. Utilize Bonus Depreciation: - Businesses can deduct 80% of the cost of qualifying property placed in service in 2024, with the percentage gradually decreasing in the following years. 3. Take Advantage of the Research & Development (#R&D) Tax Credit: - Businesses investing in innovation can benefit from the R&D tax credit. This credit applies to qualified research expenses like wages, supplies, and contract research. 4. Review Entity Structure: - Evaluate whether your current business structure (e.g., LLC, S-corporation) is still the most tax-efficient. Consider converting to an S-corporation to potentially reduce self-employment taxes. 5. Deduct Home Office Expenses: - If you operate your business from home, deduct expenses related to the portion of your home used for business, including mortgage interest, utilities, and insurance. 6. Implement a Retirement Plan for Employees: - Consider setting up a 401(k) or #SEP-IRA for your employees. Contributions are tax-deductible, and these plans can help attract and retain talent. 7. Consider Hiring Strategies: - Take advantage of tax credits like the Work Opportunity Tax Credit (#WOTC) for hiring individuals from targeted groups, such as veterans or those receiving government assistance. 8. Review and Optimize Inventory Accounting Methods: - Adjusting inventory accounting methods (e.g., #FIFO, #LIFO) could lead to significant tax savings depending on the current economic environment. 9. Monitor State and Local Tax (#SALT) Deductions: - Pay attention to state and local taxes, especially if your business operates in multiple states. Ensure you are optimizing your SALT deductions within the limits. 10. Utilize the Qualified Business Income (#QBI) Deduction: - Eligible businesses can deduct up to 20% of their qualified business income, subject to limitations based on income level and type of business. Implementing these strategies requires careful planning and, in many cases, the advice of a tax professional.