Here are four essential year-end tax tips to help you maximize savings and avoid surprises:
Small Business Year-End Tax Tips by FACT Advisors
1. Update Your Bookkeeping
Accurate bookkeeping is the foundation of a smooth tax filing process. Ensure all income and expenses are accurately recorded and that your financial statements are up to date. Proper documentation not only simplifies filing but also minimizes errors that could lead to penalties.
Quick Tip: Use accounting software or consult a professional to double-check your records for accuracy.
2. Explore Tax Credits
Tax credits can significantly reduce your liability, so take the time to research those available to your business. For example, the Small Business Health Care Tax Credit can provide relief if you offer health insurance to your employees.
Why It Matters: Unlike deductions, tax credits directly reduce the amount of tax you owe, making them incredibly valuable.
3. Make Year-End Purchases
Need new equipment, office supplies, or software? Consider making these purchases before December 31 to qualify for deductions. Section 179 deductions allow businesses to write off the full cost of eligible equipment in the year it’s purchased, providing immediate financial benefits.
Pro Tip: Ensure these expenses align with your budget and business needs to avoid unnecessary spending.
4. Review Estimated Tax Payments
If you pay estimated taxes, now is the time to review your payments to ensure you’ve covered your liability. Underpayment penalties can add up quickly, so double-check your projections and make adjustments if necessary.
Action Step: Consult with a tax professional to confirm that your estimated payments align with your income and deductions for the year.
Simplify Your Year-End Tax Prep
Navigating year-end tax planning doesn’t have to be overwhelming. At FACT Advisors, we specialize in helping small businesses streamline the process and maximize their savings.
Need expert guidance? Send us a DM today, and one of our professionals will connect with you to help you wrap up the year with confidence.
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