With the end of the year quickly approaching it is not too late to contact your tax professional to see what you can still do to maximize your deductions and lower your taxable profits. Here are 5 things you might want to consider.
Review your inventory and equipment
Have any of your inventory items or equipment been affected by depreciation or are they damaged, obsolete or useless? If so, you might be able to claim them as write-offs or write-downs. Start by making a list of all the items and what condition they are in. Your tax professional can help you identify how much of a deduction you could take for each item.
Is there any income you could delay or bad debts you could write off?
It is hard to predict if this year will be better financially than next year, but you might have income you could delay until next year to lower your profit for this year if you think that might be of benefit to your business. Additionally, writing off bad or uncollected debt can also help lower your profits for this year.
By spending money on necessary business items such as upgrading your equipment, office supplies, sprucing up your office, and prepaying for insurance and subscriptions or memberships you can help to maximize your deductions. Take a look at some of the expenses you will be incurring in the coming months and see if you can take care of any of the items this year.
Make a charitable contribution
Similarly to how charitable contributions can help lower your personal taxes the same is true when your business makes a charitable donation. In addition to making you feel good about donating to a good cause, you can use the donation as a marketing opportunity by distributing a press release and including the donation in your company’s newsletter.
Contribute to a retirement plan for you and your employees or give out bonuses or gifts
Typically at the end of the year comes the time when businesses consider giving their employees bonuses or gifts. The good news is that employee bonuses and gifts are deductible expenses. Additionally, it is not too late to consider contributing to a retirement plan for your employees, which can help your employees and can be a deductible business expense.
With all things relating to taxes, there are many conditions that must be met, and utilizing an accountant who is familiar with your business needs is always the safest way to go. These tips are not intended as tax advice.Back to blog