The SECURE Act offers an additional incentive for establishing a retirement plan in 2020. The credit for employers that adopt a new eligible plan is increased from $500 to a maximum of $5,000, and a $500 credit has been added for new SB employer plans with an auto-enrollment feature.

Generous depreciation tax breaks

One hundred percent first-year bonus depreciation is available for qualified new and used property that is acquired and placed in service in calendar-year 2020. Meaning, a SB may be able to write off the entire cost of some or all of its 2020 asset additions on this year's return. So, consider making additional acquisitions between now and year-end.

Generous Section 179 deduction rules

For qualifying property placed in service in tax years beginning in 2020, the maximum Section 179 deduction is $1.04 million. The Section 179 deduction phase-out threshold amount is $2.59 million.

Time business income and deductions for tax savings

If you conduct your business using a pass-through entity (sole proprietorship, S corporation, LLC, or partnership), your shares of the business's income and deductions are passed through to you and taxed at your personal rates. If you assume next year's individual federal income tax rate brackets will be roughly the same as this year's, the traditional strategy of deferring income into next year while accelerating deductible expenditures into this year makes sense if you expect to be in the same or lower tax bracket next year. Deferring income and accelerating deductions will, at a minimum, postpone part of your tax bill from 2020 until 2021.

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