Small business tax preparation is a time-consuming process, but if your business fails to comply with the U.S. tax code, you could face severe penalties. Here are some year-end small business tax preparation tips we recommend for any business.
- Catch up on your quarterly financials—If your business has been running for several years, you should have a good idea of how it will do going into the end of the year. As part of the small business tax preparation process, consider if your operations will grow in the last quarter or if you will experience a downturn in your business cycle.
- Make capital improvements—Tax deductions are something every small business should take advantage of. As the year comes to a close, one of the ways you can increase the tax deductions your business can claim is by making capital improvements or upgrades. For example, consider purchasing new business-related equipment or investing in other business property.
- Identify uncollectable debts and obsolete inventory—There’s always a certain amount of risk that comes from running your own business, and unfortunately, you might not use all of your inventory or collect all of your debts. Although these situations are not ideal, both are tax deductible. For uncollected debts and unsold inventory, both can be used as a deductible expense when it comes time to file your taxes.
We want to make the small business tax preparation process as easy on you as possible. For more year-end tax preparation tips or to get help with the tax process, get in touch with us today.