As a small business owner, you likely meet with your accountant several times throughout the year for guidance, advice, and the preparation of financial statements to aid in making business decisions. A critical time to do that is in December, as the year is coming to an end and there may be steps to take to minimize your income taxes. Here are a few year-end tax tips that your accountant can assist you with.
- Defer Income– Cash-based businesses can reduce this year’s income tax expense by pushing some income into January. Keep in mind that you may have savvy customers who are trying to increase their December expenses, so they might not want you waiting to invoice them until January, but you should have at least some income that can be shifted to next month.
- Make Purchases- Speaking of those savvy customers, you are savvy, too! Consider any expenses you were planning to have in the first quarter of next year to determine if they can be made now. For example, get equipment repaired or upgraded, pay some vendor invoices in advance, stock up on some office supplies, and pay out any commissions or bonuses possible.
- Inventory– Perform an inventory so that you can write off any lost, stolen, or damaged inventory. There might also be a drop in market value to be considered that your accountant can help you with.
If you would like to schedule a consultation with your accountant here at Proctor & Assocs. to go over year-end tax planning, don’t hesitate to contact us. We will assist with a 2019 review to give you personalized recommendations about year-end tax planning. We are here for the small business owners who turn to us for guidance throughout the year and look forward to helping you end the year and get started with the new year on the best footing. Call today to learn more.