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 relatively easy 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 your tax liabilities, so check with your CPA to see what information will be ideal for them to give you a solid estimate. In addition, sending this information now will enable you 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 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 spending $10, let’s say to perhaps receive $3 or 4 on your taxes … which means you have $6 or 7 more than you did before! On the other hand, 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.
Far smarter tax strategies can provide you with 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 based on your specific circumstances and needs.
ZümiFi – supporting smart, educated tax strategies to benefit you!