Sunday November 24, 2013
7 Year-End Tax Tips for Small Business
It's almost the end of the year, and this is the time to start closing out your books for this calendar year. It is the best time to check with your accountant and see if there is anything you should do to make sure that the business ends fiscally healthy. Such small changes, if any, can make a big difference on the total business income and annual tax liability.
Here's how you should get started.
Below are the few important year-end tax preparation steps that you can consider in order to achieve a healthier business financial status, more so, take advantage of the additional deductions.
Review your reports
How was your business financially? Did you meet your goals set earlier in the year? If not, why not, and what can you do differently next year to meet those goals. This information is crucial for the goal setting process, hence, to ensure that your books are up to date and accurate. Have your accountant do the complete report of all the relevant financial information of the company. Review your financial reports and double check each specific digits and breakdowns.
Any income which was received by December 31 should be counted for this current year. So ask your accountant to check on this detail, or to perhaps, defer December payments until January to cut your tax bill.
Now is the right time to spend some cash on items for your business. This is done to maximize the deductions. If your equipment needs some upgrading, then do so. It will not only make your work efficient, you will also get the most out of your deductions. Make a list of the necessary purchases and you will be amazed on how much you have saved (tax-wise).
Run an inventory check
Claim the additional deductions which sometimes attained when there is a drop in market value of your inventory. Such also depends on your accounting methods, so make sure to check with your accountant to see if this is applicable for your small business.
Start or Contribute to a Retirement Plan
Make payments to your retirement plan before the end of the year. It could help lessen your tax expenses. Max out your contributions, set up a retirement account. Talk to a professional to see which plan suits you best.
Contribute to charity
Contributing to charity is not only a great step to help others, it will also lessen your tax deductions. Of you do not want to donate in cash, you can opt to donate in kind, then claim a deduction for the fair market value. Just make sure that you have proper documentation and all receipts are intact.
Start preparing for next year now
Be ready for the next year. Being organized and creating a plan can combat mistakes; mistakes on the business processes, and mistakes on the accounting and expenses aspects. Consult your accountant for any plans about the business' finances. Outline a new system. You will definitely be amazed on the better results that you can achieve.
Looking for Professional Bookkeeping and Accounting Services? Laura Spandrio, MBA of Secure Accounting Solutions can help you in cleaning up and maintaining your business' accounting and financial health. Contact Laura today.