NEW

4 Key Changes To Depreciation Under The TCJA

As the Tax Cuts and Job Act (TCJA) continues to be unraveled by tax professionals, it’s important to review the changes and their implications on business operations and tax strategies. In this article, we’ll highlight TCJA’s changes to first-year bonus depreciation,...

3 Ways A CPA Can Make Your Business Successful

It can often seem unnecessary to hire a certified public accountant (CPA) since bookkeepers and accountants are frequently believed to be the be-all-end-all for a business’ finances. However, there are certain advantages to having a CPA by your side. While we...

3 Myths You Shouldn’t Believe About Accountants

To a business owner, an accountant that helps make sense of business finances can seem like a godsend. Whether you’re just starting your business or are already established, having a great accountant by your side is a sure way to keep your business running smoothly....

3 Ways QuickBooks Apps Can Improve Your Business’ Efficiency

Over 5.6 million businesses use QuickBooks to streamline their business’ accounting. The eye-pleasing interface, streamlined workflows, and powerful automation that QuickBooks provides to these business owners are invaluable, saving them time and money. While...

Client Spotlight: Fresno County Economic Development Corporation (EDC)

We’re excited to highlight Fresno County’s Economic Development Corporation (EDC) as our spotlighted partner this month! For over 30 years, the EDC has promoted business success within Fresno County through strategic partnerships at both the local and national level....

How To Calculate The Pass-Through Deduction For 2018

Formally known as the Section 199A deduction, the “pass-through” deduction allows many sole proprietorships, partnerships, S corporations, trusts, or estates to deduct up to 20 percent of their qualified business income. Taxpayers who are eligible can also deduct up...

Don’t Overlook These 5 Business Deductions As You File for 2018

As the old saying goes, “you gotta spend money to make money”. The topic of expenses and deductions is likely a major part of your meetings and discussions with your CPA (if you don’t have a CPA, read this) in these first months of 2019. In this article, we’ll list...

4-Steps to Choosing the Right Accountant for your Business

Choosing the right accountant to work with your small business may seem like a daunting risky decision, however it really doesn’t have to be when you’re equipped with the right tools to measure their performance. The big question is whether to hire an outside firm...

Get Your QuickBooks Ready for your Accountant

Finalizing your books for the year has already been on your mind since perhaps the beginning of the last quarter of the year. And now you have to have your QuickBooks file ready for your CPA. How can you make it easier for them to prepare your annual financial...

Is it a Requirement for a Small Business to have a CPA?

Accountant Vs. CPA First, it is important to distinguish the difference between a CPA and an Accountant. In general terms, an accountant is a professional who follows specific rules and regulations, including Generally Accepted Accounting Principals (GAAPs), which are...

Year End Tax Tips

Reading Time: 2 minutes

Always Have a Plan

As the end of the year approaches, you’ll have a sense for your tax liabilities and what you’ll be expected to pay next year. Work with your accountant or tax professional to make a plan for how you’ll pay taxes for this year. Use what you know to determine whether you’ll make quarterly payments or a lump sum. In some cases, quarterly payments are required by the IRS.

Understand Where Your Business Can Deduct

With the introduction of the Tax Cuts and Jobs Act, many businesses now have the opportunity to deduct as much as 20% of business income on their federal taxes. This usually applies only to pass-through businesses, or those where the owners themselves pay taxes on income from the business.

For C-corporations, income tax rates have dropped from 35% to 21%– which means moving from a pass-through business to a C-corp may be worth your while.

Make Retirement Savings Plans Work for You

Now is the time to assess your retirement savings plan and make as much payment as you can before the end of the year. Any payments you make will help reduce your income for the year. If you’re still dragging your feet about setting up your retirement account, there’s no time like the present. Talk to a financial expert right away.

Use Equipment Deductions for Major Savings

Equipment deductions can be a powerful way to reduce your tax liability for this year. You’re able to claim a deduction as high as $1 million if you’ve bought equipment for your organization (and used it) in this tax year. You can also claim deductions for depreciation at a rate of 100%, twice as much as what was available last year.

Holding or Rushing Revenue

You might find that your company was more profitable than expected for this year. If that’s the case, it might be wise to either defer revenue or increase expenses before the end of the year to decrease your liability. For example, you might consider holding off on billing clients and customers until the new year.

On the flipside, if you anticipate that 2019 will be a more financially successful year than 2018, consider getting as much of your cash in hand before the new year in order to reduce liability for 2019.

Embrace Charitable Giving

Charitable contributions, first and foremost, are an excellent way to increase your sense of personal pride and that of your company. But they can also be an excellent way to reduce tax liability at the end of the year. As the end of 2018 approaches, consider increasing your charitable giving levels in order to decrease your taxable income.

Use Your Reports to Set New Goals

Your end of year financial reports aren’t just a great way of looking back on your successes and failures in 2018. They should also be an empowering tool to help you set goals for your future. Work with your financial advisor to truly understand what your end of year reports mean for the future of your business. The more informed you can be, the more effective and profitable you can make your company’s 2019.

Spend Where You Need It

We don’t advocate going on a spending frenzy at your business just for the sake of reducing tax liability. But if there are purchases that your company genuinely needs, now is the time to make them. This might include inventory, equipment, office materials, or payments to suppliers. Whatever your potential needs might be, now is the time to fulfill them.

Previous

Next

Submit a Comment

Your email address will not be published. Required fields are marked *