Year-End Tax Planning Steps to Never Overlook
With 2022 on the horizon, it’s essential not to forget about year-end tax planning. Now is the best time to pay close attention to your financials and how to legally reduce your business taxes. Here are key tax planning steps you shouldn’t overlook as 2021 comes to a close.
Lower Your Tax Bill with Income & Expenses
When your small business uses cash basis accounting for taxes, it creates valuable tax planning opportunities for you. Since you recognize expenses at the point of payment and income when you receive them, you can use it to your business’ advantage to lower your 2021 tax bill. All you have to do is push your revenue to next year and the expenses for next year to this year. These are easy ways to reduce your taxable income as a business owner and save a significant amount of your tax burden.
Make Charitable Contributions
Not many business owners know this, but charitable contributions are not tax-deductible. Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, non-itemizers can deduct as much as $300 for charity. This is better than the standard rule of claiming itemized deductions to benefit. However, for non-itemizers, it applies to only cash donations. If you’re donating non-cash items like household goods or clothing, this doesn’t qualify. Another note to remember is to make charitable donations by the end of the year. After December 31, it will be deducted the following year.
Pay Close Attention to Bookkeeping
If your small business has a lot of expenses and invoices, a certified public accounting firm like Tobin & Collins, will manage your books so you can focus on your core strengths and business operations. This will ensure you’re not throwing away hard-earned income and your tax planning is up to date.
Tobin & Collins Helps Businesses with Year-End Tax Planning
Tobin & Collins is available to answer any questions you may have and walk you through everything you need to grow your business financially. Schedule a consultation with us at (201) 487-7744 or by filling out a contact form.