Whew, the year is almost over and it’s time to sit back and relax right? Not so fast! The arrival of year-end presents special opportunities for small businesses to take steps in lowering their tax liability. In addition to wrapping those gifts, think about wrapping up your accounting books and preparing to push your business forward. Not sure where to start? Here are a few tips to get you started.
- Don’t put off tax planning – Taking steps through the year to avoid last-minute tax planning. For example, make time each month to organize your financial records, balance your books and record deductible expenses. Don’t wait until the end of the year to do it all!
- Get a financial check-up – The end of the year is a great time to review the health of your business’s financial health. Your financial statements can help you review income, cash flow and profit and losses. Dig deeper into what is behind each gain and loss to develop a plan for next year.
- Wait, but don’t be late – Deferring income can lesson your tax liability. Push payment due dates until after January 1 to allow more time to pay taxes on business income. Don’t defer income if you have an immediate need for the cash. Late payments are not worth the tax benefits of deferring income.
- Spend money – Do you have plans to buy any tax-deductible items? Consider buying them by the end of the year so that you have deduct them on the current tax return.
- Seek professional advice – Now is the perfect time to talk to a tax professional to see what else you may need to do before the year ends and get an estimate of your tax liability.