Four Smart Year-end Tax Strategies For Your Business

Not having an effective strategy can result in unnecessary stress, overpaying taxes, missing deadlines, and other important things.

But most of all, planning for tax season is one of the most important activities business owners need to add to their to-do lists now.?

Here are four tax planning tips for the end of this year:

1. Pay or accrue your expenses before the end of the year.?

Account or pay for your business expenses before the end of the year to decrease your tax liability. If your business files returns on a cash basis, you can accelerate your expense deductions by paying for existing bills (or pre-paying future bills) before the end of the year. If your business files taxes on an accrual basis, you don’t have to pay off the bills immediately, but you can still get the deduction this year if the expense was incurred this year.?

For instance, if you buy a new laptop for your employees in November but won’t pay the bill until January, still record the purchase as a November 2022 expense.?

2. If you file under the accrual method, write off uncollectible accounts.

If you determine that a past invoice is uncollectible, write it off as a loss in your books. This ensures that your Profit and Loss statement (P&L) is accurate and that you don’t pay taxes on income you will not be paid for. How would you feel about advancing your knowledge in personal finance and interpreting your bank and financial statements? If that resonates, learn more about my personal finance course here .

3. If you invest in R&D, don’t miss out on the R&D credit.

Companies that invest in R&D may be eligible to receive an R&D tax credit. Be sure to claim your R&D credit, so you don’t miss out on these additional tax savings. Learn more here .

4. Bonus depreciation

If you make purchases of capital assets during the year, you may qualify for a 100% deduction of the purchase price of depreciable assets when you file taxes. Watch a short clip about it here .

If you want a free tool that will tell you how to plan and execute your year-end planning, download our newest "The Complete Guide to a Successful Year-End" here .

If you have more questions, feel free to schedule a consultation with us so we can provide more insights and answer your questions.

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