November’s here. With the holiday season and year end coming soon, many employers are planning to pay employee bonuses. If you are, the timing of bonus payments may help reduce your business tax. For example, cash-basis businesses must deduct bonuses in the year paid. So, you can pay bonuses in late 2024 or early 2025, whatever makes the most tax sense. Accrual-based businesses must pay bonuses within 2½ months after 2024 ends to claim the deduction for 2024. Otherwise, bonuses will be considered nondeductible deferred compensation. If your business would rather deduct bonuses in 2025, look into changing your bonus plan before Dec. 31 and resetting the payout date. Contact the Cg Team for help. © 2024