For those who have opted for an extension to file their 2021 taxes, keep in mind that there are ways to reduce your current tax bill. And for those who met the April 18 filing deadline, now may be the time to consider six potential tax saving opportunities as you look ahead to next year’s filing time.

1. Depreciation

If you are a business owner, keep in mind that items such as depreciation don’t have to be decided at the time the asset is placed in service. Bonus depreciation is automatic. You can elect out of bonus depreciation for each asset class by attaching a statement to your timely-filed tax return and instead depreciate the asset over its useful life. Or consider using IRC §179 to fully expense capitalized assets on an asset-by-asset basis.

2. Required minimum distributions

If you are taking required minimum distributions (RMD) from your IRA and you are charitably inclined, consider having your brokerage pay your RMD directly to charity. This is called a qualified charitable distribution (QCD). It doesn’t get recognized as income and therefore keeps your adjusted gross income lower (potentially reducing your Medicare premiums) and still allows you to take the standard deduction. The QCD is limited to $100,000 per tax year.

3. Donor advised funds

Another charitable strategy is the use of a donor advised fund (DAF). The Internal Revenue Code allows you to take a tax deduction in the year that cash or other assets are transferred to a DAF. Funds in a DAF can be invested until you recommend the DAF distribute the funds to one (or more) charities in the future. Interest, gains, and dividends generated by investments made by the DAF are not taxable to you. The use of a DAF can help you achieve tax planning goals with great flexibility. Donating appreciated assets to the DAF can increase its usefulness as a tax planning tool since you may be able to claim a deduction for the fair market value of the donated assets without ever having to pay capital gains tax on the appreciation.

4. Capital gains and opportunity zones

If you are expecting a large capital gain in 2022, or have gains that would be recognized in 2021, consider deferring the tax liability by using an Opportunity Zone investment. If you reinvest eligible capital gains in an Opportunity Zone investment during a 180-day window, you can defer the tax on the original gain until December 31, 2026. As an additional benefit, if that Opportunity Zone investment is held for a total of ten years, the total appreciation will avoid federal income tax.

5. Retirement planning

Another big open opportunity for 2021 is retirement planning. Certain plans can still be established and allow for employer contributions to be made up until the extended due date of the return. Consider making the maximum allowable contribution to your retirement plan. For 2022, 401(k) and 403(b) plans have a $20,500 contribution limit — with a $6,500 catch-up contribution for taxpayers who reach age 50 by the end of the tax year.

6. Real estate

The real estate market is hot everywhere, and §1031 is still an option. The opportunity here is to defer gain by rolling proceeds from a sale into like-kind property exchanged within a specified timeframe. Be aware — this strategy involves very specific timelines and steps that must be followed. If you are ready to be out of the real estate game or have had difficulty finding replacement property, a Delaware Statutory Trust may be a good fit. You are still doing a like-kind exchange with a qualified intermediary, but are acquiring an interest in a professionally managed property selected from one of several offerings with flexible closing dates.

For more information, contact Tammy Neel Pessmeg at tammy.neel@CLAconnect.com or 407-802-1213. For more information on CliftonLarsonAllen LLP, visit CLAconnect.com.

This article originally appeared on The Patriot Ledger: tax saving tips for business owners to consider this year or next