Top 5 End-of-Year Tax Strategies for Small Businesses

Navigating the tax refund season is harsh for every company, but small businesses are exceptionally vulnerable as it pertains to dissecting tax issues and making optimum decisions for financial health. The time to take into account tax season is not at the first of the entire year — it is all year long, and these five strategies can help any small company plan for a more comfortabletax season with fewer headaches.

Make managing your taxes a priority.

Traditional tax planning involves endeavoring to speed up deductions and credits while deferring income. Many taxpayers are cash-basis taxpayers, meaning they get to deduct expenses when the expense is paid, plus they have to declare income when payment is received. Therefore, expediting charge payments while deferring income payments can improve the current year’s taxes position.

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Keep in mind that the inverse is also true. If the business anticipates more significant earnings in 2016, it is wise to gather income this year and wait for deductible expenditures until 2017 to brain off an undesirable situation for 2018.

Invest in retirement life now.

If you own a tiny business, you can create retirement plans that take benefit of tax refund rules to maximize personal tax savings now and retirement cost savings later. Rather than trying to tackle the intricacies of setting up a retirement plan yourself, talk to a professional. You will discover a wide variety of options — 401(K), SEP IRA and SIMPLE programs — that it is worth having a trained expert to help you understand the machine and choose an ideal option that will aid both your business and personal financial health now and in the future.

Understand taxable versus untaxable fringe benefits.

Fringe benefits such as a company car, subsidized dishes, and insurance can be considered a great way to cover services and enhance a far more enticing employee deal. However, these fringe benefits are taxable almost all of the time — unless they are specifically excludable for legal reasons. Knowing which fringe benefits linger outside the taxable realm can reduce the tax burden every year. Whenever your business understands which benefits load up this double punch, you can save money on payroll taxes. The tax refund for every is a little different, so it is essential to choose the right fringe profit investment for your own company.
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Find the metallic coating in damage.

Most small businesses conclude with net operating losses (NOL) during the first few years of operation. A net running damage means tax deductions are higher than the taxable income, which usually happens when business expenditures have exceeded revenue. Though this feels like bad news, NOLs can be used to recover past tax repayments and reduce future tax repayments. NOLs can create tax relief by applying loss to previous payments and receiving a creditor by applying the net loss to future taxes. The rules vary based on your business, so focusing on how to work them can have a huge impact.

Invest in counsel to gain your business.

Tax planning must not be an end-of-year scramble. Instead, it should involve a consistent, yearlong dialog with your taxes legal professional or accountant. It is better for your business’s continual health — as well as your sanity — to work with a specialist who can offer valuable counsel on some selections you make over summer and winter that can dramatically change your tax refund situation. Whenever you establish a romance with a tax advocate, you are less likely to face audits and much more likely to save significantly as your business increases.


Best Investment

Other Than Buying a House, What Is the Best Investment for My Tax Refund?

If you filed your federal income tax return on time, you have probably received your refund if you had one due. If not, it’s sure to be on the way soon. You may already have plans for that money, or perhaps you haven’t thought about it yet. Chances are, your refund probably isn’t big enough to buy a house, but saving it can be the start of a plan to have enough for a down payment. If you’re a homeowner, there are several other things you can do with that refund. read this information straight from the source.

The first thing you should do before you receive your refund, and definitely before you spend any of it, is to have a plan. If you don’t already have a household budget, this is a great time to sit down and put one on paper. What are your debts? What are your monthly expenses? Where are the gaps? If you want to buy a house, how much money do you need to save?

Many people flag a certain percentage to put into savings. If you’ve scrimped for the past year, you might want to take a (small) percentage to spend as “fun money.” We’re not talking about anything extravagant like a cruise—maybe a night out to a fancy restaurant, or some new clothes.

Financial experts agree that the best use of extra money is paying down debt. If you have credit card debt with high interest rates, throwing some chunks of money at those balances is smart. However, it’s smarter NOT to pay off debt on mortgages, home equity loans, or anything else that allows you to deduct interest payments from your next tax return. The tax advantages far outweigh the benefits, and will actually lower your interest rate by as much as 3 percentage points.

Whether you’re a homeowner or you plan to buy a house in the near future, an excellent use for your tax refund is an emergency fund. You should have enough money to cover at least three months of expenses in case you lose your job, get injured or have a family emergency that affects your ability to earn income or saddles you with an unexpected large debt. Keeping your emergency fund in a money market mutual fund may be a good choice, where your money will earn an average of 4%.

Best Investment

If you are getting ready to sell and buy a new house, making some upgrades to your current home can net good returns when you go to sell. Look for our next article to learn which upgrades and renovations yield the biggest returns. need more details? go to

We are a group of a professional network of real estate investors specializing in buying homes online, quickly, with no hassles. The company has streamlined the entire home sale process, working nationwide to buy houses in any condition, as is, at a fair offer price. This allows home sellers to avoid listing fees, holding fees, maintenance, ongoing payments, and ongoing stress. Make sure to use your tax refund in good way not the other way around.