Is there still time to pay 2018 bonuses and deduct them on your 2018 return? - Crawford Ellenbogen

There aren’t too many things businesses can do after a year ends to reduce tax liability for that year. But you might be able to pay employee bonuses for 2018 in 2019 and still deduct them on your 2018 tax return. To be eligible for this favorable tax treatment, you must be an accrual-basis taxpayer and the bonus liability must have been fixed by the end of the tax year, which requires passing the “all-events test” and may necessitate a bonus pool arrangement. If you’re a calendar-year company, you must pay the bonuses by March 15. Contact us to learn more.