|By Mark Bloom |
Here are some tips to help you save money doing your taxes this year.
Organize Now - Gather your data as soon as you can. Make a file folder called "2011 Taxes" now. Start organizing your receipts and files in January. It is easier to avoid the last minute rush if you start earlier. If you need to request replacement paperwork, you will have sufficient time to gather it all.
Project Your Taxes - Spend a little time projecting what your taxes are early. Making a draft of known income and deductions for the year early can help you identify opportunities for savings. It's best to start this process in December in case there are deductions requiring actions during the calendar year.
Postpone Income - Deferring income into the next year can reduce your tax liability from the year before. Your strategy for postponing income will depend upon your business legal structure and your profit and loss for the year.
Increase Expenses - Buy those business items for next year to reduce your reported income. Things like equipment, office supplies, travel, repairs, and even some bills can help you reduce your reported profits in a year.
Write-off Inventory - You may be able to show devaluations to your inventory as a financial loss. Damaged and obsolete goods can be devalued and shown as a loss for some business accounting methods.
Donate to Charity - Clean out your closets and give what you do not need to charity. Be sure to get a true fair market value on each item donated and deduct it from your taxes.
We hope you find these ideas useful in triggering you to save money this tax season. Be sure to check with your accountant for exact details about how these ideas might effect your business.