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Five Essential Tips on Business Tax Planning

Keep business records

Any business that is run without business records is bound to fail. Record keeping is a key element of any business whether small or large. Income, purchases and expenses should be clearly indicated and receipts and invoices attached. With this information in place, it becomes easy for the CPA tax accountant to come up with the real monthly tax figure.

Update the books

Books of accounting have to be constantly updated so as to sure that the information is free and fair from any manipulation. There are those who choose to use accounting software packages. The data entered in these programs should be very accurate. Source documents should also be kept intact as they are vital when it comes to conducting the actual audit.

Income and charitable contributions

There are certain situations when one expects to receive income at the close of the month of December. Such income can be deferred to January of the coming year in a bid to benefit from an additional four months grace period. The deferred incomes should largely depend on your profit margins for that particular financial year. In case you have charitable contributions to make in the coming year, try to send them out in the present year and ensure that you pick the receipts.

Dealing with purchases and bills.

Come up with a projection of the amount of money that you intend to spend in the initial quarter of the year. Such purchases can be made prior to closing the year. Any bills should be offset early enough in case the cash flow will permit this.

Write-off obsolete goods

The particular accounting system that you use will determine whether it is safe to write-off all damaged and obsolete goods at the close of the year. It is also advisable for the CPA tax accountant to assist you in making retirement contributions.

If the following tips are followed, huge savings may be realized after the tax consultant is through with the review of accounting and taxes remitted to the government. Because in business every cent counts, try to utilize the above mentioned tips to generate savings.

Notably, these tips are applicable for both small and large business enterprises. It is worth noting that even small businesses require the services of a highly qualified and experienced CPA tax consultant like Roar Consulting.