Aside from identifying a number of nuances in last year’s tax law changes and interpreting the effects of congressional leadership turnover, a new tax guide should help midsized business owners monitor a series of federal tax trends for 2007.Published by national CPA firm RSM McGladrey, the “2006 Tax Planning Guide” includes a Top 10 list of tax-planning strategies for midsized companies and issues owners should watch for on the horizon.
“An inexpensive and cost-effective way to stay up-to-date on tax law changes is to seek out your trade association for general tax information that may impact your industry,” said executive vice president of tax services Michael L. Metz, via e-mail. “Then, follow up with your accountant to test the application of the idea against your facts.”
The rise of federal deficits, compliance gaps, extension of expiring provisions, back-burnered estate tax reform, AMT reform and the status quo on individual income tax and capital gains are all issues RSM McGladrey predicts will arise in the next year.
Metz also singled out three key tax-planning strategies for 2007:
- Review your international activities and structuring;
- Defer income and accelerate deductions and thoroughly examine your current method of accounting; and,
- Review state and local tax opportunities.
For businesses in their high-income years, RSM McGladrey’s guide says that owners may want to consider deferring some income to later years if they use the cash method of accounting, or the accrual method. Enhancing cash flow could be balanced against the permanent benefit of the current lower rate.Another strategy RSM McGladrey proposes is updating compensation and benefits packages for employees over the age of 50 and staying aware of the changes in financial accounting rules for any form of equity compensation.
