Small Business Tax Planning – 4 Practical Tips

December 30, 2009 by  Filed under: Taxes 

Small Business Tax Planning: The thought of having to pay taxes in the US can drive anyone up the gum tree. This is especially true to small business as they spend so much time trying to make a profit that the thought of having to share it with the government is a disheartening thought. But the taxman will be calling and it will only pay to be ready.

1. Update your books:

An important part of small business tax planning is updating accounts. Some extra time must be dedicated to updating the account books on a regular basis. In fact, it is only good practice to take some time out with the account and go through the books to ensure there are no tweaks needed in order to ensure a smooth audit.

2. Defer Income:

If you are to receive some money during the month of December try to defer it to the first week of January. This will give you a take holiday, so to speak, till the first week of April. All deferrals will depend greatly on your profits and your losses for the financial year. Another thing, if there are any charitable contributions due for the forth coming year try to send them in during the present year itself and don’t forget to collect receipts.

3. Purchases:

Try to envision any expenses you will have to make in the first quarter of the new financial year. Make those purchases before the year ending. Pay all your bills early if cash flow permits.

4. Write-offs:

Depending on the kind of accounting, write off all the damaged and useless goods in the business and make provisions for contributions for retirement.

When the accounting is complete, there will be a huge saving on taxes to be paid to the government and the business will have a bit more cash to improve functioning. Since every cent counts, why not try to save a whole lot of them by applying the above practical tips for keeping your accounts updated?

Remember, with a few timely business management changes, you can improve and enjoy your professional life as a small business owner focused on succeeding. Empower yourself with the Quality Content advantage today and be a winner!

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Article Source:

Deepanjolie Figg - EzineArticles Expert Author

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