Should your C corp reverse itself?

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in Small Business Tax,Small Business Tax Deduction Strategies

In the usual course of events, a C corporation will try to shift taxable income into 2014 while accelerating deductions into 2013. But that’s not always the best approach.

Strategy: Review and react to your company’s tax situation at year-end. For instance, if your corporation is “on the bubble,” it may do the exact opposite of the conventional wisdom.

In other words, there are times when it makes sense to pull more income into 2013 and push deductions into 2014.

Here’s the whole story: Unlike the graduated tax rate structure for individuals, the corporate tax rate structure includes two bubbles. Corporate taxable income between $100,000 and $335,000 is taxed at the rate of 39% to phase out the benefits of the 15% and 25% brackets applicable to a corporation’s first $75,000 of taxable income. A corporation’s income between $75,000 and $100,000, and between $335,000 and $10 million, is taxed at 34%. Taxable income above $10 m...(register to read more)

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