It’s never too early to get a headstart on your end of year finances and begin preparing for tax season. With less than one quarter left in 2015, here are a few quick and easy things you can do to see where you’re at and how your finances will look at the end of this year:
- Talk to your accountant with any questions you may have. Prepare a list of questions you need to ask about your year end finances and small business taxes.
- Review last year’s deductions. To ensure you maximize your small business deductions, review last year’s tax deductions to determine if you’re still eligible for those same ones this year.
- Legally reduce your tax liability. If your business did well this year, you can guarantee Uncle Sam will want his generous cut. If you have a favorite charity, consider making your contribution before December 31st. You can also consider increasing your expenses by giving your employees a bonus, purchasing that new camera or computer you’ve had your eye on, or putting extra money toward your business loan. If you reduce your taxable net income and increase your tax deductions, your tax liability may be less, which is to your advantage. Consult with your accountant to make sure there are no negative implications of this and create a tax strategy for your business.
- Review your year to date finances. While it won’t yet give you a whole picture of how the year will end, reviewing the last nine month’s profits and loss statements will help you get a clear picture of where you’re at and make predictions about how the year will end. This will help you begin 2016 strategically in regards to your small business finances.
- Research changes to the tax code. Take 20 minutes to do some research about tax laws that may have changed in 2015 that may impact your taxes.This will help you take advantage of every credit or deduction possible. Your accountant should know and inform you of any changes that will affect your business, but it never hurts to do a little studying of your own.
- Start preparing 1099s. If you used a contractor or freelancer earlier in the year and know you won’t be needing their assistance in the next two months, you can start preparing their 1099s now.
- Create a payment plan or save now for your tax payment. If you think you will owe taxes for this year, you’ll want to decide whether to set up a payment plan with the IRS or save money now to meet this tax liability when the time comes.
A little planning and preparation now can save you a lot of stress and headache in April. Close out 2015 quickly by getting ahead on the financial aspect of your business and party on this holiday season!
Frequently Asked Questions:
Why should I talk to my accountant about year-end finances?
Your accountant can provide tailored advice, ensure compliance, and help maximize deductions, potentially reducing tax liability.
Why review last year’s deductions for my small business?
Reviewing previous deductions ensures you capitalize on eligible ones, optimizing tax benefits and minimizing liability.
How can I legally reduce my tax liability before year-end?
Options include charitable contributions, employee bonuses, or business expenses. Consult your accountant for personalized strategies.
Why is it important to research changes to the tax code?
Staying informed helps identify new credits or deductions, ensuring you leverage all available tax advantages for your business.
When should I start preparing 1099s for contractors or freelancers?
Begin now if you won’t need their services in the next two months. Early preparation streamlines year-end processes and compliance.
