This post is intended to supplement a post written in December of 2015 about year-end tax tips.
1. Assess Year-End Financial Reports
New York bookkeeping services can offer many types of financial expertise. Beyond keeping your financials organized, a New York bookkeeper can utilize sophisticated software to provide you with informative reports. Actionable reports will help you, as a business owner or manager, to calculate expansion goals for the upcoming years.
Having difficulty interpreting these reports? Your bookkeeper would be more than happy to offer their professional insights from these reports.
2. Defer End-of-Year Income
Any income that your business earns through the end of the year (December 31) is incorporated into your year-end income. To keep taxes manageable, many businesses strategically delay customer/client payments until the new year. This can save your company valuable money toward the beginning of the new year, and may benefit your customers, too.
3. Spend Money
While reducing expenses is a priority for all businesses, that doesn’t mean you shouldn’t spend any money to improve operations. Enabling your employees to fulfill their job responsibilities with more resources will help you, as a business owner or manager, to earn more income. For example, upgrading technology may improve the speed of some processes, or give more capabilities to others. Helping your employees to learn more about your industry through educational classes or industry periodicals is a worthwhile investment, too. Even a business loan may be considered tax deductible– but make sure that it is worthwhile.
Internally, spending money on resources that will help your business to optimize efficiency is beneficial, too. If management allocates a certain amount of money toward these expenses, then use this money to ensure that you receive the same amount of money next year.
Curious about whether or not your spendings will be fully tax deductible? Check with your New York bookkeeper.
4. Evaluate Your Inventory
Especially if you are in the retail industry, your inventory comprises a large percentage of your assets. In the natural flow of the market, the value of certain products tends to rise and fall. This is especially true for small businesses where one trademark product makes consistent sales, and others decline in popularity. If the value of unsold items declines, then you may be able to claim deductions on those products.
This does, however, depend upon your industry, as well as your bookkeeper’s methods. Be sure to discuss this topic with them before the end of the year.
5. Donate to Charitable Causes
Everyone has causes that hold a special place in their heart. Contributing to charity is a fantastic way for your business to give back to the community– especially during the holiday season. And, more than that, donations to charitable causes are tax deductible. This means that, with one check, your company can make a positive impact on a deserving cause and decrease tax spending. This is especially true if there is a cause related to your industry.
Be sure to itemize and receive receipts for these contributions to prove these contributions to the IRS. Additionally, you should clarify with your New York bookkeeping service that donations to the charity in question are tax deductible.
Heartfelt CFO and Tax Services: New York Bookkeeping Services
Navigating your financial commitments and plans at the end of the year alone can be stressful. With the assistance of a qualified New York bookkeeping service committed to raising your profits, you can launch your company into the new year with substantial savings and measurable goals for the new year. Contact us to learn more about how a bookkeeper can help your business to make this transition effortless and smooth.
