Owners of wineries in California have to face competition from a number of other winery companies, so it is important to take advantage of tax incentives that could help the business thrive. However, the operator of a winery may find it challenging to understand and claim complex tax benefits while also ensuring that their business is successful. If you are the owner of a winery in California and you need help claiming tax incentives for your company, you should consult with an experienced California accountant for wineries as soon as possible. The Cook CPA Group recognizes that winery owners may not have a lot of time for deciphering complex tax regulations, and we are here to handle your tax and accounting needs. Our firm is here to discuss the tax incentives that are available to wineries in California.
Common Tax Incentives Available for Wineries in California
Every business owner should be aware of tax incentives that could lower their tax liability. However, as the tax law frequently changes, California winery owners and many other taxpayers may have difficulty keeping up with new laws. Fortunately, the experienced California winery CPAs could help you handle your tax needs. The following is a list of common tax incentives that are available for wineries in California that our firm could help you obtain.
Cash Method of Accounting
The cash method of accounting is a form of accounting where payments are recorded when they are received, and expenses are recorded when they are paid. As a result, using this accounting method for a winery could provide a winery owner with increased flexibility and may even permit the owner to defer some of their tax liability.
One benefit of using the cash accounting method is that wineries that earn under $1 million in revenue could make deductions for the wine when it is sold. For instance, wines sold from a barrel would permit the winery owner to make deductions earlier than they normally would be able.
Buying a winery presents an option for an individual to create an opening to decrease their tax liability by claiming tax deductions that may apply to their unique situation. For example, separating depreciating assets on the property of your winery will allow a taxpayer to recover tax savings. Assets like bridges, roads, equipment sheds, and many other items could be used as a depreciable asset.
Selecting a Business Structure
Tax savings could also be found by changing the business structure used for your winery. For example, if you did not establish your winery as a C corporation, you should now be aware that the C corporation tax rate has decreased to 21% from a maximum of 35%. However, establishing your winery as a C corporation will also make it subject to double taxation and many other tax regulations. We could work with you to determine whether it makes sense to change your business structure to a C corporation to claim a tax credit.
Alternatively, if your winery is structured as a sole proprietorship or a tax flow-through entity, you may be eligible to claim the qualified business income deduction. This deduction could provide the owner of a winery with a 20% tax deduction under certain circumstances.
There are a few other tax incentives for operating a winery or vineyard in California. For example, you may be able to claim incentives for developing your vineyard or even by replacing diseased vines that are affected by Pierce’s Disease.
To learn more about tax services the Cook CPA Group could provide for your winery, you should consult with an experienced California CPA for wineries as soon as possible.
Tax Services for California Wineries
The Cook CPA Group offers a wide range of tax services for winery owners. Our firm would be pleased to work with you to determine the best option for managing your tax liability.
Tax planning is one service we offer that is vital for handling your tax liability. Thorough tax planning will help you claim tax deductions or credits that may apply to your business. Additionally, if you failed to file taxes in a previous year, we could help you file your back taxes and claim your tax refund.
Additionally, if you are facing a tax audit from the Internal Revenue Service or the California Franchise Tax Board, we could also help you resolve this matter. Many tax audits begin because a taxpayer made one or multiple errors while filing tax returns. Our team of committed California accountants for wineries will be able to provide you with tax audit services to avoid a large tax bill or other possible consequences that may arise.
Consult with Our Experienced California Accountants for Wineries to Discuss Your Potential Tax Incentives
If you operate a winery and need help with claiming tax incentives that apply to your business, you should consult with an experienced California CPAss. The skilled accounting team at the Cook CPA Group has years of experience managing tax liabilities for a wide range of clients in California, and we are ready to work with you. We are committed to helping California winery owners claim their tax incentives. To schedule a free consultation to discuss the details of your potential case, call the Sacramento CPAs at (916) 432-2218. You could also contact our accounting team online to schedule your free consultation today.