Every year about this time I remind business owners and
CFO's (financial officers) to review their business
deductions for the year. If you use the calendar year as
your tax year (like most of us do), December 31st is a very
important date. And this year, working with your tax
professional is more important than ever!
Here are two important facts:
1. Depending on where you live and your tax rate, about
40% of everything you make will go to the Government, and
the final accounting for most businesses comes on December
31st. The more you make, the more your "partner" will take
in taxes.
2. Conversely, any legitimate business expenses you incur
in the next few weeks are deducted directly from that tax
bill. In the U.S., that means "Uncle Sam" is willing to
chip in and pay for about 40% of whatever you buy for
business purposes! Take advantage of that!
If you need new office equipment, a new computer, or
routine office supplies, take action! It's like getting 40%
off! If you can pre-pay some regular business expenses
(insurance, rent, supplies or fees) by the end of December,
they come directly off your "bottom line," which means
lower taxes in April.
Now, obviously, the expenses must be for legitimate
business purposes, and there are some limitations. And
obviously you should check with your accountant or tax
advisor for specific advice in your particular situation.
No cheating! (It never pays.) But remember that a few
months from now you will pay taxes on every dollar you make
this year and if you can legally reduce that amount by
stocking up now, that's to your advantage. Think about it!
CFO's (financial officers) to review their business
deductions for the year. If you use the calendar year as
your tax year (like most of us do), December 31st is a very
important date. And this year, working with your tax
professional is more important than ever!
Here are two important facts:
1. Depending on where you live and your tax rate, about
40% of everything you make will go to the Government, and
the final accounting for most businesses comes on December
31st. The more you make, the more your "partner" will take
in taxes.
2. Conversely, any legitimate business expenses you incur
in the next few weeks are deducted directly from that tax
bill. In the U.S., that means "Uncle Sam" is willing to
chip in and pay for about 40% of whatever you buy for
business purposes! Take advantage of that!
If you need new office equipment, a new computer, or
routine office supplies, take action! It's like getting 40%
off! If you can pre-pay some regular business expenses
(insurance, rent, supplies or fees) by the end of December,
they come directly off your "bottom line," which means
lower taxes in April.
Now, obviously, the expenses must be for legitimate
business purposes, and there are some limitations. And
obviously you should check with your accountant or tax
advisor for specific advice in your particular situation.
No cheating! (It never pays.) But remember that a few
months from now you will pay taxes on every dollar you make
this year and if you can legally reduce that amount by
stocking up now, that's to your advantage. Think about it!
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