The Importance of Year-End Tax Planning




               As a business owner, taxes are a necessary evil, and they are especially important to keep in mind toward the end of the year. As year-end approaches there are some things you need to plan for, including tax planning for your small business. With year-end tax planning your business can reduce liabilities and increase deductions. With the help of proper organization, a solid business plan, and an experienced accountant, you can avoid a stressful situation by paying unnecessary taxes.

Here are three important tasks to conduct as the end of the tax year-end approaches.

1. Start by getting you tax documents organized, which includes both your business expenses and income. If you handle your own accounting for your business, it's prudent to use an accounting software program, which will help you record your income and expenses accurately as well as make it easier to organize your finances. An accounting software program or even an actual Accountant can also be use for invoicing clients, creating business reports and having access to balance sheets and income statements. It's important to keep all financial areas of your business in order, including inventory monitoring, invoicing, incoming and outgoing funds, payroll, and other monetary paperwork. If you start getting organized now, the remainder of your year-end planning will go smoothly.

2. Consider setting up a retirement plan. if you haven't done so already,  it's not too late to set up a retirement contribution plan. Whether you decide to use a Traditional IRA or Roth IRA, any pretax contributions you make prior top year's end will reduce your taxable income. As a result, your tax liability is reduced, offering some much-needed tax relief.

3. Set up an appointment with your tax accountant. This should be the Accountant or CPA that you meet with to file your business tax return. If you have been following your business plan throughout the year with recordkeeping and organized files, the end of year-end meeting with your Accountant/CPA will go smoothly.

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