Most businesses have already familiarized themselves with the change in tax laws, whether it is in preparation for closing out the books for 2018 or paying quarterly taxes. Nevertheless, experts point out that there are some adjustments that can still be legally applied to reduce a business owner’s tax burden this year.
6 tips for an even better new year
Since these tips are fairly general, it is a good idea to check with the bookkeeper or accountant about these changes, ideally refining the tips to be most effective for a particular business.
- Go through the books: Compare a rough estimate of how you think you did this year against the final tally from actually crunching the numbers. Keep an eye out for red flags and go through them with an accountant, bookkeeper or even a lawyer with business law experience. This can pinpoint potential legal issues before the IRS gets involved.
- Defer income: It may make sense to defer income to the following year to stay in a lower tax bracket.
- Spend money: It may make sense to buy new equipment, purchase upgrades, pay bills or even stock up on office supplies to maximize deductions.
- Check inventory: A drop in the market value of your product may mean additional deduction.
- Think about your retirement plan: This is a great way to shield money that would otherwise be taxable. If you already have one, pay the maxim amount if possible.
- Donate to charities: The holidays are a time for giving. Make sure that the IRS recognizes the non-profit you choose and keep documentation. Also, remember that it need not be cash – toys, clothes or inventory can be deducted at a fair market price.