5 Year-End Tax Tips
December 15th, 2010 by Morna
As the year is winding down, you can still make decisions that may lower your tax bill. Here are five for you to consider with input from your accountant:
1. Review your business books. You need a clear picture of your earnings and expenses before you make any decisions. Ask your accountant or bookkeeper if you should be tracking something you aren’t.
2. Defer income. Unless you expect to make considerably more income in 2011 when our tax rates will likely be higher, you might want to defer income until after the first of the year. If this is the case, send out your invoices late this month so you won’t receive payment until January.
3. Increase your expenses. Stock up on business equipment and supplies before year end. Pay some of your bills early.
4. Contribute to your retirement plan. Review requirements for payments to your plan. If you don’t already have an individual 401(k), you may want to set up one before the end of the year.
5. Give. Charitable donations are tax deductible if you have a receipt.
These strategies apply differently to each business owner based on her particular situation. Since I’m not a financial professional, take time to discuss your strategy with your personal tax advisor.
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