Top 6 Actions for Shopify Sellers to Reduce Their Income Tax Liability for 2019
“I’m buying the tesla I’ve always wanted!”
That’s an exact quote from one of our amazon sellers after we saved him over 70k in taxes he expected to pay. Now these results aren’t typical but he did adopt change number #4 noted below.
The below list(in no particular order) covers some of our top strategies we helped our clients implement for the 2018 tax year.
1. Move to a lower tax jurisdiction- Nevada, Florida, Washington.
2. Retirement plan contributions- SEP, 401k, Cash Balance defined benefit(DB) plan
3. Convert from accrual to cash basis for tax purposes. If your receivables are greater than your payables this could be a beneficial move.
4. Change your accounting method for inventory under 471.
5. Reimburse yourself for the use of your home office or storage space on your personal property.
6. If you plan to sell your business adopt section 1202 to qualify for a tax free sale. (needs to be five years out)
The above items should be carefully evaluated discussed, and planned for with your CPA. Book a tax strategy session here with us.