Tax-Saving Strategies for Year-End

As year-end approaches, small business owners shift focus from driving sales to reducing next April’s tax bills. With some strategic planning and expense adjustments in Q4, entrepreneurs can implement major tax-saving tactics to lower upcoming tax obligations. Let’s review key moves to make before December 31st.

• Purchase equipment – Take advantage of enhanced Section 179 and bonus depreciation deductions for new equipment, machinery, vehicles and technology investments.
• Pay estimated taxes – Make January estimated payment by December 31st to increase this tax year’s deductible amount.
• Pay bonuses & reimbursements – If possible, pay staff bonuses, qualified reimbursements and director fees this calendar year to realize deductions sooner.
• Settle expenses – Pay outstanding supplier invoices, rent, loan interest and expenses now before 2023 arises.
• Review 1099s – Verify contractor 1099 reporting requirements to avoid fines on missed filings. Issue 1099s to qualifying vendors in late January once annual values are totaled.
• Meet with accountant – Schedule an appointment to discuss tax strategies unique for your entity type and optimize year-end transactions.

With the distraction of holidays, entrepreneurs often let significant savings slip by not implementing key tactical money moves before December 31st. Get ahead over the next weeks with these impactful tips! Reach out to your accounting advisor ensure you realize every possible deduction this tax year.