Schedule Cs, especially face steep taxes for their net profit but there are sometimes strategic moves you can make toward the end of the year to reduce that net profit a little.
Slow down on collections. Make exceptions over the holiday if you are running a high net profit for your customers and let them pay over the first of the year. This will delay the recognizing and taxation of that profit into the next year if you are a cash-based company.
Catch up on accounts payable so you can take all those deductions this year instead of next. These expenses count against your net profit when they are paid, not when they are billed.
Make sure your mileage records are updated and ready to go. Remember your tax preparer needs your business mileage AND your total mileage.
Consider making some larger purchases of supplies/other items you know you will need before the end of the year.
Have your tax preparer/accountant look at your balance sheet for discrepancies BEFORE you get your taxes done. Common accounting mistakes for small businesses can often be caught by an experienced financial expert by looking at a balance sheet as well as an income statement.
Happy New Year!
Written by Laura Fleig
Fleig Financials, LLC
