Now that November is done, it’s a great time to close out your November books and schedule a meeting with your CPA! This is a perfect opportunity for your tax expert to tell you where you stand, and what you are likely to owe for taxes. Assuming your books are clean throughout the year, this should be a relatively easy thing to share with them.
ZümiFi recommends sharing the following with your tax professional:
- Profit & Loss, from January thru November
- Balance Sheet as of November 30, 2019
- Details about any fixed asset purchases made in 2019, as well as notification of any assets you disposed of during the year
- A rough idea of the income and expenses you expect for Dec 2019
Your tax circumstances may benefit from you also providing certain personal details that may impact on your tax liabilities, so check with your CPA to see what information will be ideal in order for them to give you a solid estimate. Sending this information now will enable you both to discuss potential tax strategies, some of which may require you to act before the year ends.
One last tip – many businesses file their taxes on a cash basis, and it’s not uncommon to hear folks advise purchasing things for the business just to reduce their tax liability. Think this through though, and consult with your tax professional. Generally purchasing additional items that you would not have otherwise purchased for your business is not wise – you are literally spending $10 let’s say to perhaps receive $3 or $4 dollars off on your taxes … which means you actually have $6 or $7 dollars than you did before! It can be an excellent tax strategy to TIME your purchases – meaning if you were planning on buying a new computer in the first few months of 2020 let’s say, it might make good tax sense to accelerate that purchase so it hits in 2019 instead to receive the tax deduction for that purchase in the current year. But notice, we’re just talking about timing. We are not talking about purchasing things that you wouldn’t otherwise purchase.
There are actually far smarter tax strategies that can provide you more direct benefits while reducing your taxes. Retirement plan contributions are an excellent example. So don’t take comments from other business owners as tax advice – gather your books, schedule a meeting, and discuss with your CPA now! You deserve professional advice, from an expert, who is advising based on your specific circumstances and needs.
ZümiFi – supporting smart, educated tax strategies to benefit you!