Are you shaking your head in disbelief?
Yep, the final quarter has arrived and we’re talking about year-end.
Here are 7 things you should start checking off your list to prepare for the end of the year. A few small changes can make a big difference in your total income and tax liability for the year.
- Review your financial reports. If you’re being responsible, you should be reviewing these reports often, but now is a good time to compare year-to-year. Now is a great time to ask your financial guru to run all relevant business reports and schedule a time to walk through them together.
- Clean up your bookkeeping records. Make sure accounts payable and receivable are all up-to-date. Plan for your payroll and any bonuses you may give out at the end of the year. Issue 1099s to all independent contractors who received payments in 2019, and do so early if you won’t use a vendor or contractor in the last few months of the year.
- Donate to charity. Charitable donations don’t always have to be in the form of money. Are there any school fundraisers or auctions happening nearby? As we get closer to the holidays, many organizations are starting to collect donations for gift drives. You can write off donations such as toys, books, clothing and other goods.
- Make any purchases. Do you have any upgrades that are necessary for your business? Software or security needs? You can maximize deductions by making any office or equipment purchases before December 31.
- Send in tax payments by the reporting deadlines. If you pay estimated taxes quarterly or monthly, be sure to hit the last few months of your tax deadlines. If you filed extensions from 2018 tax filings, that date is October 15. Stay on track and help avoid tax fees and penalties.
- Decide if you’ll defer any income. Compare your income level to the past few years and decide if it’s significantly different this year. Depending on your income levels, you could cut your tax bill if you defer collecting December payments until after January 1. Ask your accountant if this would be a smart move for you.
- Contribute to a retirement plan. Now is the time to max out any contributions to your retirement plan, whether it’s for yourself or your employees. Any income you place in retirement accounts can be written off as a deduction.
Now is the time to plan so you make sure you end the year fiscally healthy.