Select a fiscal year other than December 31 for your C corporation.

Personal tax planning is facilitated when eligible corporations select fiscal years other than December 31. For example, if a shareholder-employee finds himself or herself in the 24-percent tax bracket but realizes that a normal December salary payment would cause creeping into the 32-percent bracket, that individual can enter into an agreement with the corporation in November to defer receipt of December’s salary until January. This effectively avoids having December’s salary taxed at the 32 percent rate and has no impact on the corporation’s taxable income, because the January payment is in the same fiscal year as a December salary payment would have been.