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Posted by: Charles P Myrick CPA Posted on: Dec 20 2016 Posted in: small business, tax savings

Why Consult a Business Advisor for Year-End Tax Planning?

The end of the year is a busy time. You have the holidays to plan for, family to see, and gifts to buy. You also have to take care of some important business duties so you will have a successful year when the calendar flips over. Year-end tax planning is one of the most important tasks you can take on at the end of the year. 

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 tax 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 exactly what to do and when to do it when you go into another new year. Then, you won’t have to worry about facing any surprises when tax time rolls around.

More importantly, tax planning will help you make smart tax decisions that will save you money. 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, let’s say that your small business is having an unusually bad year. You know you will pick it up next year, but right now, things are not going well. As long as you run a business that passes profits and losses through to the individual, your financial advisors will be able to defer some of your income until the following year while accelerating your deductions into this year. This will give you a serious tax break for the year. You won’t have to report as much income, and you will get to claim more deductions. That will more than make up for your bad year.

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.

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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.