"Use the break between the big sales holidays to consider your taxes"

As most shops begin to take down their winter holiday decorations, there’s a sense of temporary calm before the big spring holiday season. Even before you begin prepping for Valentine’s Day, you may want to start thinking about your taxes. Hortica Retail Sales Specialist Maria Shepherd discovered there may be some tax breaks to consider.

If your business is showing a profit, reduce that profit as much as possible to keep the tax bill low. If you’re not, then taxes become less important. Still, you can do things now that can help you reduce your profit for tax purposes in future years.

In the article “Tax tips for florists,” featured in the October 24, 2018, SAF E-brief, CPA specialist Derrick Meyers took the time to lay out some options that could reduce taxes.

Depreciation is one of the biggest tax advantages you have. The federal expensing election (179) is now at $1 million. You can accelerate depreciation on assets up to this amount. You can take $1 or $1 million—or any amount in between—to dial in your tax liability exactly where you want it.

Another big change is bonus depreciation, which is now 100 percent of assets purchased with no limit. Bonus depreciation automatically applies to all purchases unless you elect out of it. This means that all assets you buy that have a class life of 3, 5, 7, or 10 years are automatically depreciated 100 percent in the year of purchase. You can opt out of bonus depreciation totally for the year, or by each life class.

20 percent pass-through business deduction
This tax break allows eligible businesses to reduce all profit by 20 percent before taxes are calculated. However, you’ll need to discuss certain limitations with your accountant. This deduction also applies to rental income and publicly traded partnerships—but not other passive income such as interest, dividends, or capital gains.

When reviewing your floral operation’s profits and sales, assets, rental income, possible revenue losses, and potential changes in payroll deductions, keep in mind that any major changes to even one of these tax factors may also affect your current insurance policies. Talk with your Hortica agent to make sure your coverages are in place.

For more information:

Publication date:


Receive the daily newsletter in your email for free | Click here

Other news in this sector:

© FloralDaily.com 2019

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber