As a business owner, it can be difficult to ensure tax law compliance while taking advantage of every credit that is available. Here are a few tips to help you remain compliant and help reduce your tax liability.
Invest in Assets: If there is equipment, supplies or other business assets you know you will need in the upcoming year, invest in those before the year ends in order to reduce your tax liability.
Prepay for Services/Accelerate Expenses: If there are services you know you will need or expenses you know that will be due in the upcoming year, go ahead and prepay those before year-end.
Write Off Bad Debts: Be sure to write off any debts that have not been paid within your terms. Just be aware that, if those debts are eventually paid, you will need to make the necessary adjustments to your financial records.
Bonuses/Retirement Contributions: Year-end bonuses are always appreciated and will help reduce your tax liability. The same is true for contributions to retirement programs. If you do not have a retirement program in place, consider setting one up prior to year-end.
Contribute to Charity: Contributions to charity not only help lower your tax liability but those contributions also benefit your community.
Hire a Tax Specialist: Consider this your best tip of all. With the ever-changing tax laws, why not take advantage of the peace of mind that only a tax professional can provide.
We hope you have found these tips to be helpful. For more information on how Business Financials can help you with your year-end tax preparation, please contact us at 540-932-8560.