4 Year End Tax Tips for Small Business
Year End Tax Tips for Small Business.
Labor Day Weekend is over and the end of the year will be here before we know it. Rather than waiting until December or January to worry about your taxes, there are some things you can start doing now that can greatly reduce your tax responsibility. Here are four year end tax tips for small business to help you get a jump start on tax season.
Spend money on your business.
Do you need a new computer system? Can you pay any vendors now instead of waiting until next year? Could you use a new company vehicle? A great way to lower your tax responsibility for the year is to spend money on your business. Therefore, now is the time to start making these types of purchases, the end of the year will be here soon.
Any income that a business collects before December 31 counts toward the current year’s income. Therefore, if you can defer the income until January 1 or after you can reduce your taxable income for the current year. Depending on the amount of income received, deferring funds can greatly reduce your tax obligation for the year.
Now is a great time to start reviewing financial documents for the year. Ask your accountant or bookkeeper to run all of the relevant reports for your business and schedule some time to review them together. Ask them if they can make recommendations on the best way to organize your business’s finances to ensure you owe the least at tax time.
Contribute to a retirement plan.
Any funds that you pay toward your retirement fund before January 31 are completely tax deductible. Therefore now is the time to start maximizing the contribution you make to your retirement fund to lower your taxable income. If you haven’t started a retirement fund yet, contact a financial advisor and start one as soon as possible.
If you own a small business and need tax help, contact the pros at USA Tax Prep Plus today!