2022 Year-End Tax Planning for Businesses
How do businesses thrive in uncertain times? By turning toward opportunity, which includes proactive tax planning.
U.S. businesses are facing pressure to drive revenue, manage costs and increase shareholder value, all while surrounded by economic and political uncertainties.
Disruptions to supply chains brought about by the pandemic have continued into 2022.
Inflation and rising interest rates have made the cost of debt, goods, and services more expensive and cooled consumer spending. The stock market has declined sharply, and the prospect of a recession is on the rise.
What’s more, the outcomes of the upcoming November U.S. congressional elections — which as of the publication of this article, are as yet unknown — will shape future tax policies.
How do businesses thrive in uncertain times? By turning toward opportunity, which includes proactive tax planning. Tax planning is essential for U.S. businesses looking for ways to optimize cash flow while minimizing their total tax liability over the long term.
This overview provides a checklist of areas where, with proper planning, businesses may be able to reduce or defer taxes over time.
Unless otherwise noted, the information contained below is based on enacted tax laws and policies as of the publication date and is subject to change based on future legislative or tax policy changes.
Recent Legislative Changes
Tax Credits
Corporate AMT & Treatment of R&E Expenses
Maximize Tax Benefits of Net Operating Losses
Generate Cash Savings Through Tax Accounting Method Changes & Strategic Tax Elections
Is “Reverse” Planning Better for Your Situation?
Write-off Bad Debts and Worthless Stock
Maximize Interest Expense Deductions
Tax Accounting Method Changes – Is A Form 3115 Required and When?
State and Local Taxes
Partnerships and S Corporations
Considerations for Employers
Begin Planning for the Future –
Businesses should consider actions that will put them on the best path forward for 2022 and beyond.
Business can begin now to:
Establish or build upon a framework for total tax transparency to bring visibility to the company’s approach to tax and total tax contribution.
Reevaluate the choice of entity decisions while considering alternative legal entity structures to minimize total tax liability and enterprise risk.
Evaluate global value chain and cross-border transactions to optimize transfer pricing and minimize global tax liabilities.
Review available tax credits and incentives for relevancy to leverage within applicable business lines.
Consider legal entity rationalization, which can reduce administrative costs and provide other benefits and efficiencies.
Consider the benefits of an ESOP as an exit or liquidity strategy, which can provide tax benefits for both owners and the company.
Evaluate possible co-sourcing or outsourcing arrangements to assist with priority projects as part of an overall tax function transformation.
Perform a cost segregation study with respect to investments in buildings or renovation of real property to accelerate taxable deductions, claim qualifying bonus depreciation and identify other discretionary incentives to reduce or defer various taxes.