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End of the Year Tax Accounting QuestionsThis is the time of year for business owners to take a look at what has gone on in the company all year, what they anticipate for the rest of the year and how they are going to handle eliminating as much tax paying as possible. Below are some considerHow much deferred taxes do I have available from previous years? The best part of an LLC or S-Corp is the fact that you can take a loss and not use the whole thing in that particular tax year. You should ask your accountant if you have any deferred taxes left over from previous years to use against your current gains. What are my projected revenues/profits for the rest of the year? Being able to make a projection for the rest of the year from November through December is very important. If you need help from your business advisor, get it. These numbers will tell you how much profit you will be paying tax on using a straight up basis. What are my projected taxes for this year? Once you know your projected taxable income, you can determ Is there any employee related deductions I can make before the end of the year? Sometimes there are benefit plans available that will allow you to contribute to your employees to keep them happy and reduce your taxes at the same time. Can I write-off any inventory? Normally you can?t just write off inventory but if you have slow moving or dead inventory that you can try and sell at a big discount, your accountant will have fuel to allow you to take the excess you didn?t sell at that discount and let him do a ?write-down? on it. Do I have to depreciate everything? With changed tax codes, you don?t have to depreciate as much as in the past. You can deduct up to $108,000 worth of new business equipment that has been placed in service by the end of the year. Most businesses that have less than $3 million in revenues will never pass this threshold and can deduct everything. Your accountant should determine if depreciating certain things is a better idea based on your projected profits. Should I buy new equipment or prepay expenses? Sometimes it helps to buy equipment or prepay expenses before the turn of the year to lower the amount of profits you will have and at the same time buy things you need while you have the money available. If you are using an accounting program such as Quick Books (which you should be doing), this should not only give you a pretty solid picture of your revenues and expenses but also allow you to save on your accounting fees. It?s a smart idea to have an advisor or business operations savvy accountant go over your bookkeeping before the year ends. Sloppy bookkeeping, using software or not, is useless to any business owner. Keeping track of business financials is important for many aspects of any business including being able to hand over the file to your accountant. It?s time and money wasted if your tax preparer has to take your books and completely do them over again. Bonus Year End Material Taking Inventory of Yourself The end of the year is a perfect time to give yourself an analysis of how you have done throughout the year. Ask yourself the following questions and use the answers to progress personally and in business for next year. Have I attained my goals and objectives for the year? Have I delivered products/service to the best of my ability or could I improve? Have I delivered products/services in the greatest possible quantity in which I am capable? Have I allowed procrastination to decrease my efficiency/ Have I improved my personality and demeanor towards employees, customers and vendors? Have I been persistent in following my plans to completion? Have I reached decisions promptly and definitely on all occasions? Have I been over or under cautious? Have I been open minded and tolerant in my business undertakings? Has my conduct toward my business associates and employees induced them to respect me? Have I been good at budgeting my time, income and expenses? Have I been too conservative? How much time have I devoted to unproductive or unprofitable effort? Have the purchasers of my products/services all been satisfied with me? If I had been the purchaser of my own products/services would I be a satisfied customer? Answer these questions honestly and you will have a basis for goals to achieve next year. Making business and personal goals before the start of a year is the key to success for that year. Don?t go overboard but don?t be conservative either. Give yourself something to strive for. You?ll be glad you did. Article Directory: http://www.articledashboard.com George J Sierchio is a Principal at Action Business Partners, Inc., a small business advisory company dedicated to helping business owners meet their goals. Mr. Sierchio has over 14 years of experience owning and operating various successful businesses and frequently writes/publishes business related articles. Contact him at: gsierchio@actionbusinesspartners.com www.actionbusinesspartners.com Permalink: http://expert-talk.com/tips/260/end-of-the-year-tax-accounting-questions-50260.htm Related Tips and Advices
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