Managing Income Taxes After Year-End
A taxpayer may want to modify their tax bill either higher or lower at the conclusion of the year. This fact sheet will walk through a couple of provisions that allow them to make those modifications.
Income tax management is not minimizing total taxes owed, but rather maximizing after-tax net income over the lifetime of the business. Minimizing the near-term tax liability often results in overcapitalizing the business through the purchase of assets or purchasing inputs to create deductions that reduce taxable income to near zero. Additionally, agricultural producers miss an opportunity to build Social Security benefits (especially disability coverage) by not having significant net farm income and paying self-employment taxes.