3 Year-End Tax Moves for Small BusinessesSubmitted by JMB Financial Managers on December 16th, 2019
Year-end is quite possibly the most hectic time for small business owners. It’s a time of measuring how the business did the previous year and planning for the one ahead. In the midst of that, don’t forget you should also be making year-end tax moves to help reduce your tax bill to end the year as fiscally responsible as you possibly can.
1. Review Your Financial Statements & Make Last Minute Purchases
Not only is reviewing all your financial statements vital to your company’s health but it is also important to do this before year-end to see if there are any other purchases you should make before closing out the books for the year. Taking this step reduces your profits and therefore, your taxes.
After analyzing your revenue streams, determine if you should purchase any big-ticket items before year-end as to minimize your deductions.
2. Utilize Your Retirement Plan
If you haven’t made contributions to your retirement plan, now is the time to do it. Take this opportunity to max out your plan contributions and lower your taxable income.
If you don’t have a retirement plan set up, you can do so before December 31st to take advantage of the tax deductions offered to small businesses that establish new retirement plans. Contact us today if you’re interested in learning more about the different benefits each type of retirement plan offers to small businesses.
3. Make a Charitable Contribution
Although the year-end can be chaotic while trying to make last minute business decisions, year-end also means the holiday season is in full swing. There’s no better time to make a charitable contribution than during the holiday season. Not only is it a generous move that charitable organizations will appreciate, it is a good tax move for your business, especially under the new rules of the 2017 Tax Cut and Jobs Act.
Be sure to keep documentation of any donations you make as they are tax deductible. Donations don’t always come in check form; these tax breaks can also be material items that can be deducted at market value.
Start Planning for 2021
The new year is right around the corner, take proactive steps and start planning sooner rather than later. After making all of your year-end tax moves, don’t forget that creating a budget to follow in the upcoming year should be a top priority.
As always, if you find yourself in need of assistance, reach out to a financial professional to see how they can benefit you.
About the Author
Jack Brkich III, is the president and founder of JMB Financial Managers. A Certified Financial Planner, Jack is a trusted advisor and resource for business owners, individuals, and families. His advice about wealth creation and preservation techniques have appeared in publications including The Los Angeles Times, NASDAQ, Investopedia, and The Wall Street Journal. To learn more visit https://www.jmbfinmgrs.com/.