It’s a busy time of year for businesses as things get wrapped up for the tax year and prepared for the next year. Whether you are closing out your books or setting financial goals for the near future, there are many small changes you can make to your fiscal advantage.
- Look into deferring income
You will need to count any income received by the last day of December as that year’s income. If you are looking to save on this year’s tax bill, you can defer that income so that it is counted for the following year instead.
- Make purchases for business needs
Now is a great time to stock up on office supplies, upgrade equipment and appliances, or make advance payments to your vendors. All of these business purchases and payments are deductions for the tax year, which could put more money in your pocket.
- Check on your inventory
If you keep an inventory, ask your accountant and tax preparer about claiming deductions for any drop in market value. Gathering information about your inventory now will save you time and effort when it comes time to do your taxes.
- Contribute to your retirement plan
Don’t forget that you can reduce your income for the year by contributing to a retirement plan before the last day of December. It’s also a great time to set up a retirement plan if you haven’t already.
- Give to charity
Many businesses and individuals give to charities around the holiday season. It’s a great thing to do, but it also helps with your deductions for the year. Just make sure to keep your receipts.
- Review your books thoroughly
You likely feel short on time at the end of the year, but you still need to review your finances for the year. If you have placed your finances in the hands of a professional, ask them to run relevant reports for your business that you can go over together. This will help you have a better grasp on your fiscal situation and also help you identify ways that you can organize for next year.
- Check for other tax options
If you have a business accountant, don’t forget to check in and find out if there is anything else you could be doing to end the year and start a new one in the best shape possible. You might want to ask about S-corporations, ROTH conversions, rental properties, and more in order to benefit your business most effectively.