The fourth quarter is in our sights, and we don’t want to scramble during the holidays to find critical documents, like financial statements and receipts.
Here are some tips to remember for the year’s end:
Keep Your Receipts
Receipts are the cornerstone of your business, especially in its infancy. Log them as quickly and efficiently as possible to keep the ship running smoothly. I advocate for this pretty regularly because it’s so crucial, and is still overlooked by disheveled business owners. This is a fine time to get your books, receipts and numbers in order to determine if more business spending is possible. At minimum, enter these receipts into an accounting program such as Quickbooks. Receipts and contemporaneous records are best, but if I can’t have receipts, I’ll take records.
Deduct Tangible Business Items
When we think about office spaces, we’re not just considering the bodies occupying the square footage, but what type of property can be found there as well. I’m talking about all business equipment that qualifies for Section 179 deduction. This tax code helps businesses establish whether their properties – from computers to office furniture – are deductible.
The catch about Section 179 is that it can change annually and with little or no notice, so do your homework. See Section 179 Qualified Financing to ascertain whether your material goods and properties can be deducted.
December 31 is the annual deadline to calculate these items. The total amount can reach as high as $500,000 if you want them claimed for this year.
Offer Stock Contributions
Has your business sponsored a fundraising event or donated to a charity this year? Normally you would deduct the amount donated, which is still a fine way to go.
However, you can donate appreciable stocks in lieu of cash. The business can deduct the value of the stock at the time of the contribution instead of the value of the original purchase amount. So if you bought at $10 per share, and it’s now worth $20, you can deduct the latter amount at tax time. That’s the amount you paid plus its appreciated value.
Keep this in mind around holiday time, when you’re likely to be in the spirit of giving.
Healthcare Tax Credits
The healthcare tax credit is unique to each business because the number of full-time employees and wages vary. Use form 8941 to calculate your eligibility. If your business will not owe taxes this year, you may be able to carry the credit into 2017. If a remainder of the tax premium exists, you can claim business expenses against it.
Contact Brinen & Associates to discuss more money-saving tax tips for your small business.