(NU)—Tax season tends to be people’s least-favorite time of the year, which is only compounded for small businesses. Don’t live in fear under the ever-nearing tax thundercloud, make sure your business is prepared to meet the daunting season. Here are five basic rules to keep your business ahead of tax season.
Regularly update accounting records. Knowing the intricacies of your company’s financial situation throughout the year makes tax season much less intimidating. Plus, if all records are up-to-date and exact, your accountant has more time to spend on finding ways to save the business money instead of organizing information.
2. Triple check your tax bracket. Marginal tax rate analyses help guarantee that your small business isn’t needlessly pushed into a higher tax bracket. This is especially beneficial if your business is teetering on the edge. Recognize income when your tax bracket is lower; pay deductible expenses when the bracket is higher.
Take inventory of supplies, equipment and other potential write-offs. Equipment might be damaged or too outdated to maintain productivity. Replacing office supplies and obsolete assets before the new year gives the company added deductions. For costly technology, confer with your accountant to see whether an immediate or depreciable write-off is preferable. Financial planners like On Call Accountants help maximize deductions and increase expenses to prevent owing exorbitant fees. Learn more about possible deductions at www.oncallaccountancts.com.
Contribute to a retirement plan. If you haven’t set up a retirement plan yet, do it before year-end to reduce this year’s income. Qualified retirement plans afford tax deductions for all contributions. Find an appropriate plan for your business, and explore contributions limits. A retirement savings opportunity will also garner loyalty among employees.
Look into business tax credits. Small businesses may be eligible for numerous tax credits, as listed on the IRS website. Examples of possible credits are Low-Income Housing, Credit for Increasing Research Activities and Disabled Access Credit.
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