• Skip to primary navigation
  • Skip to main content
Strobl PLLC

Strobl PLLC

Business and Corporate Law Firm

LawPay

(248) 540-2300

  • Home
  • About Us
    • Community Commitment
    • Recruiting
  • Attorneys
    • Henry J. Andries, Jr.

      Henry J. Andries, Jr.

      Member

      Phone: 248.205.2710

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Business Law, Commercial Contracts, Corporate Law, Healthcare Law, Labor & Employment, Litigation, Real Estate, Tax

      Experience

      Since 1995, Henry J. Andries, Jr. has engaged in private practice with a concentration in employment law, complex civil litigation...

    • Lynn M. Brimer

      Lynn M. Brimer

      Member

      Phone: 248.205.2772

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Banking & Financial Services, Bankruptcy & Creditor's Rights, Business Law, Commercial Contracts, Corporate Law, Litigation, Mergers & Acquisitions, Non-Profit Law, Real Estate, Tax

      Experience
      • Assist taxpayers with representation before the internal Revenue Service, the State of Michigan Department of Treasury and other taxing authorities...
    • Anthony Cimini

      Anthony Cimini

      Associate

      Phone: 248.205.2764

      Connect:

      Practice Areas

      Banking & Financial Services, Bankruptcy & Creditor's Rights, Business Law, Commercial Contracts, Corporate Law, Litigation, Real Estate

      Experience
      • Assists distressed businesses in Chapter 11 bankruptcy filings, with expertise in Subchapter V bankruptcy filings, including prefiling negotiations, preparing first...
    • Jon P. Everly

      Jon P. Everly

      Managing Member

      Phone: 248.205.2759

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Business Law, Commercial Contracts, Corporate Law, Estate & Succession Planning, Non-Profit Law, Real Estate, Tax

      Experience
      • Advises closely held businesses and their owners in a broad range of legal matters, including formation, taxation, succession planning, and...
    • Michael L. Geller

      Michael L. Geller

      Member

      Phone: 248.205.2770

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Business Law, Commercial Contracts, Corporate Law, Healthcare Law, Labor & Employment, Litigation, Real Estate

      Experience
      • Advises and assists clients in the creation and structuring of their business entities.
      • Regularly counsels clients relative to employment issues that...
    • Paul M. Kavanaugh

      Paul M. Kavanaugh

      Member

      Phone: 248.205.2711

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Banking & Financial Services, Business Law, Commercial Contracts, Corporate Law, Healthcare Law, Labor & Employment, Mergers & Acquisitions, Real Estate

      Experience

      In his more than 30 years of practicing law, he has helped businesses protect their financial and intellectual property, minimize...

    • Jay R. LaBarge

      Jay R. LaBarge

      Member

      Phone: 248.205.2778

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Banking & Financial Services, Business Law, Commercial Contracts, Corporate Law, Estate & Succession Planning, Healthcare Law, Mergers & Acquisitions, Non-Profit Law, Real Estate, Tax

      Experience
      • Advises clients on a full range of real estate matters, including drafting and negotiating purchase agreements and residential, commercial and...
    • Randi LaFave

      Randi LaFave

      Associate

      Phone: 248.205.2712

      Office: Bloomfield Hills

      Connect:

      Practice Areas

      Banking & Financial Services, Business Law, Commercial Contracts, Corporate Law, Estate & Succession Planning, Labor & Employment, Mergers & Acquisitions, Real Estate, Tax

      Experience
      • Counsels start-ups and growing companies on fundraising, including preparation of private placement memorandums
      • Works with clients to uncover and resolve bank...
    • Brian J. McCullough

      Brian J. McCullough

      Member

      Phone: 248.205.2715

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Business Law, Commercial Contracts, Corporate Law, Estate & Succession Planning, Healthcare Law, Real Estate

      Experience
      • All legal aspects pertaining to healthcare providers, including licensing, certification issues, survey and compliance issues, Medicare, Medicaid and other insurance-related...
    • Pamela S. Ritter

      Pamela S. Ritter

      Member

      Phone: 248.205.2765

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Banking & Financial Services, Bankruptcy & Creditor's Rights, Business Law, Commercial Contracts, Corporate Law, Litigation, Real Estate

      Experience
      • Counsel to lenders in a range of loan origination transactions, including commercial and industrial loan facilities, real estate and construction...
    • James A. Rocchio

      James A. Rocchio

      Of Counsel

      Phone: 248.205.2748

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Bankruptcy & Creditor's Rights, Business Law, Commercial Contracts, Corporate Law, Estate & Succession Planning, Mergers & Acquisitions, Tax

      Experience

      Mr. Rocchio has deep expertise in the area of taxation. Over the course of his legal career, he has counseled...

    • Nelson B. Stieper

      Nelson B. Stieper

      Of Counsel

      Phone: 248.205.2742

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Estate & Succession Planning

      Experience
      • Performs probate and trust administration, revocable and irrevocable trusts, wills, special needs planning, gift planning, and asset protection
      • Advises on divorce,...
    • Thomas J. Strobl

      Thomas J. Strobl

      Member

      Phone: 248.205.2713

      Office: Bloomfield Hills, Michigan

      Connect:

      Practice Areas

      Banking & Financial Services, Business Law, Commercial Contracts, Corporate Law, Labor & Employment, Mergers & Acquisitions, Real Estate, Tax

      Experience
      • Advises a broad spectrum of purchasers and sellers in merger and acquisition transactions involving primarily private companies.
      • Represents financial institutions and...
  • Expertise
    • Banking & Financial Services
    • Bankruptcy & Creditors’ Rights
    • Business Law
      • Commercial Contracts
      • Corporate Law
      • Healthcare Law
      • Labor & Employment
      • Mergers & Acquisitions
      • Non-Profit Law
      • Real Estate
      • Tax
    • Estate & Succession Planning
    • Litigation
  • News
  • Contact Us

End of the Year Tax Reduction Strategies for Small Business

December 10, 2020

As 2020 (finally) comes to a close, it’s time to start thinking strategically about minimizing your company’s tax liability.  While COVID-19 has affected some industries more than others, all small business owners will benefit from doing a little research on potential tax deductions before meeting with a tax professional this year. 

Purchase business equipment.  Taxpayers purchasing equipment may make an election which allows them to expense otherwise depreciable business property, including computer, software and qualified real property. For 2020, taxpayers may choose to expense up to $1,040,000 of equipment costs.  In addition, careful timing of equipment purchases can result in favorable depreciation deductions in 2020. In general, under the “half-year convention,” taxpayers may deduct six months’ worth of depreciation for equipment that is placed in service on or before the last day of the tax year.

Take advantage of a lower tax rate. Taxpayers reporting on a cash basis that are expecting  profits to be lower than normal in 2020 resulting in a lower tax rate may want to consider pulling ahead some of next year’s receivables while delaying some 2020 deductions. 

For example:

  • Incentivize customers to pay invoices due in January 2021 early (before December 31, 2020), and
  • Delay 2020 holiday bonuses for employees until January 2021

Utilize the employee retention credit.  Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), an employer may be eligible for the employee retention credit if, during an applicable calendar year, the employer’s business was fully or partially suspended due to orders from an appropriate governmental authority or suffered a significant decline in gross receipts. The credit applies to qualified wages paid (and certain health insurance costs) to retained employees after March 12, 2020 and before January 1, 2021.  The maximum credit with respect to any retained eligible employee is $5,000.  Employers participating in the Paycheck Protection Program are not eligible for this credit.

Cash in on previous business losses. As a result of the CARES Act, certain small businesses are permitted to apply a net operating loss from 2018, 2019, or 2020 to income from the last five years for an immediate refund. The qualifying deduction can be taken by:

  • Carrying it forward and applying against future taxes, or
  • By amending previously filed returns

Defer payroll taxes.  The CARES Act allows businesses to delay payment of the Social Security portion of their payroll taxes (6.2%) incurred between March 27, 2020 and December 31, 2020. Employers will owe half of the deferred amount by December 31, 2021 and the other half by December 31, 2022.

Fund retirement savings plans.  Consider setting up or contributing to a retirement savings account.Small business owners have options for both personal and employee retirement plans, some of which are specifically designed for small business owners, and all of which could provide tax deductions for personal contributions as well as those made on behalf the businesses employees. 

Options like IRAs, SEP IRAs and 401(K)s offer a variety of set-up options and contribution limits so a tax expert should be consulted for details before making a choice.  Also, while many retirement savings plans allow contributions until the 2020 tax filing deadline (April 15, 2021 plus any extensions), some do require that the fund be established by December 31, 2020 for eligibility.

Donate to charities. A charitable contribution deduction is available to businesses.  A corporation is generally allowed to deduct charitable contributions up to 10% of its taxable income.  Under the CARES Act, the corporate limitation is increased to 25% of taxable income for contributions made in calendar year 2020.  Contributions bypass-through entities are allocated to individual equity interest holders and are subject to the individual’s limitations.  An individual is generally allowed to deduct charitable contributions up to 60% of adjusted gross income.  Under the CARES Act, the individual limitation is increased to 100% of adjusted gross income for cash contributions made in calendar year 2020.  Further, the CARES Act creates a temporary above the line deduction for up to $300 in cash contributions. 

Strobl PLLC is a team of experienced and trusted lawyers that can advise on all legal tax matters. For more information, visit Strobl online at www.stroblandsharp.com or on LinkedIn.

News small business tax,  tax reduction,  year end tax planning

https://www.strobllaw.com/wp-content/uploads/2022/11/cropped-strobl_pllc_c.jpg

At Strobl PLLC, our attorneys are committed to your team. We collaborate with clients to share our expertise and guide them to success.

  • Home
  • About Us
  • Attorneys
  • News
  • Contact Us
  • Banking & Financial Services
  • Bankruptcy & Creditors’ Rights
  • Business Law
  • Estate & Succession Planning
  • Litigation
Follow Us On LinkedIn

(248) 540-2300

33 Bloomfield Hills Parkway, Suite 125
Bloomfield Hills, MI 48304

© 2023 Strobl PLLC. All Rights Reserved.