The end of the year is always a busy time for business owners. While juggling holiday planning, you also have to take care of some important business duties so you will have a successful year when the calendar flips over. As 2017 draws to a close, the possibility of major tax legislation makes tax planning more important than in previous years. This year, good tax planning has to acccount for what may happen in the near future.
What Is Year-End Tax Planning?
If you’re like many small business owners, you’re scratching your head at the very thought of year-end planning. What exactly does it mean? To put it simply, year-end tax planning is the process of looking at all of your tax options and determining how to move forward with your business. Effective planning will help you determine your business and financial strategy moving forward. You will know what to do and when to do it when you go into another new year.
More importantly, tax planning will help you make smart decisions that will yield tax savings. This is done in a variety of ways. Working with your business advisor, you might find a way to:
- Reduce the amount of taxable income that you file;
- Lower your tax rate;
- Maximize your tax credits, all while avoiding tax mistakes.
Example of a Tax Planning Strategy
Small business advisors employ a variety of tax planning strategies. Since they are well versed in the tax code, they can find the best solutions for all of their clients.
One strategy that business advisors can employ is juggling a small business’s income and expenses at the end of the year in order to improve the tax benefits. For example, your business advisor can look for ways to accelerate deductions into 2017 while rates are high and defer income into future years with the anticipation of lower rates.
Year-end tax planning is an important part of running a successful business. If you want to thrive, you need to have the right strategies going forward. With the help of a business advisor, it is easy to find the right strategies for your business. Then, you can lower your tax rate while getting the most out of your income and deductions.
Charles P Myrick CPA, Washington DC tax preparation firm, specializes in accounting and bookkeeping services for new business start ups and entrepreneurs. If you are a new entrepreneur, give us a call. We invite you to learn more about the small business accounting services that are available: (202) 789-8898.