Take Steps Now for Income Tax Savings

Posted on December 15, 2015

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The End of the Year is Prime Time for Maximizing Income Tax Savings

income tax savingsThis may be your busiest time of year. Your business may be offering year-end or holiday specials, or you may be in a push to reach sales goals or other objectives. Add to this your personal holiday shopping, events and family traditions and your calendar is likely full to bursting. However, it’s time to squeeze one more item onto your to-do list for the end of the year. It’s time to think about income tax savings strategies, served up alongside your fruitcake and eggnog.

While it may seem early to be talking income tax savings, it is a good time to be meeting with your accountant now to figure out what steps you can take before the end of the year to make a positive impact on your tax bill. You will also be interested in ways to make your income tax process come together more smoothly. Take a look at these tips:

Automate the process wherever possible. Talk with your accountant about which processes you can automate with your current software and staff. There are likely some areas that, unless you get a fresh perspective from your accountant, you are missing out on automating. For instance, you may be making multiple entries every time you receive a check, entering the amount onto a deposit record and the accounts receivable, among other entries. Talk with your staff and your accountant to see where you can make the process less labor-intensive and time-consuming.

Review expenses. Ideally, you’ve been tracking your business expenses all year, linking them to the appropriate account, matching purchase orders with invoices and keeping receipts filed in an organized manner. Like many small business owners, however, you may be so busy running the company that details like expense records get pushed aside for later.

Take time now to begin sorting out your expenses. You don’t want to get to tax season with an unsettling feeling that you’re being forced to overstate your income because you were scrambling to find records of all your expenses. In addition, by reviewing your expenses, you can take time to determine if it’s time to spend a little more money on some equipment or other deductible purchase for your company in order to lower your tax bill. Talk with your accountant about the best types of purchases in this situation.

Talk tax law. Your accountant can fill you in on the changing tax laws and how they will affect your upcoming tax return. It’s important that you know what will change, because you may be able to take steps now that will impact your tax return in the spring. Items like standard mileage rates frequently change and can have a significant effect on your tax return.

Plan for next year. Review the factors that influence your tax return and determine whether it’s time to make changes in January. You may also want to consider outsourcing areas of the business that you are currently managing in-house. For business owners, December is the perfect time to evaluate current processes and look for ways to start the new year fresh.

When you need the expertise of a qualified accounting firm, call Bert Doerhoff, CPA and his staff at AccuBiz. Whether you need an annual tax return or fully outsourced accounting services, AccuBiz is ready to assist you. Call us to set up an initial appointment, where we can discuss your business and how we can help.

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