Business Tax Accounting Tips header graphic

Business Tax Accounting Tips

Even with solid business intelligence and accounting system in place, there are some check ups that should be performed from time to time, no matter the size of your business. Consider the following tips periodically to avoid paying for small oversights somewhere down the line. The end of the year is a good time to take stock and give your business the best odds possible for the new year.

It€™s a god idea to take time at least once a year to sit down and simply look over the books, as it were. Make sure things are up to date. As you settle in to browsing from week to week or month to month, you€™ll probably notice a few things that you€™d rather had been done a different way.

The end of the year is also a good time to consider ways to defer income for tax reasons. Any income that your business can receive during the first part of January instead of December cuts the taxes owed. Anything deferred until the first part of January will not have taxes owed until April 15th of the following year.

The strategy of deferring income to best utilize delaying tax payments only works if you can handle how your cash flow is affected. It can really save some money, but obviously this strategy isn€™t worth implementing if it will cripple your business in the short term situation.

The converse is true as well; the end of the year is a good time to make needed purchases for office supplies. These are all items that can be deducted for the year that€™s ending. If cash flow allows, make necessary purchases before the end of the year to make some last minute adjustments to taxes season.

Contributing to a retirement plan is a good way to take the bite out of tax season. There are different contribution limits for the various types of plans. This is one tax accounting area that is probably better discussed with a professional financial planner.

Talk with colleagues and friends. You may know someone that knows a tax accountant or other type of financial consultant who may be willing to look over your taxes for a €˜friendlier€™ rate than if you were to cold call them.