Attorney Thomas B. Burton provides advice on ways small business owners can legally reduce their taxes before the end of the current tax year.
Text Transcript of Video: How Small Business Owners Can Legally Reduce Their Taxes Before the End of the Year
In today's video, I want to talk about how small business owners can legally reduce your taxes before the end of the year. So I was thinking about this topic recently because it's something I think about in the fourth quarter of each tax year as a small business owner myself with my own law firm.
There are some things you want to look at in the fourth quarter of 2019, so before the end of the year here. Ways you can reduce your taxes for this year before. January one of next year. And one thing I always look at is usually by the fourth quarter you have a pretty good idea of how much income has come in for the year.
Now, there may be a couple weeks left in the year, but a lot of your income is in the door. So think about items your business needs regularly ongoing business expenses and what you're going to need in January and then in the next few months. So one easy example is office supplies, if you're running low on office supplies.
December is often a good time to. Buy some of those supplies stock up on paper pens and things of that nature you can also look at advertising spending that you are going to do anyway and pay for that in December and get the receipt in December before January 1 of next year.
Another thing is some companies will offer you a discount if you prepay for next year's services. So if it's a software, you know, you use or an ongoing monthly bill, I recently had one vendor email me and, Say if you prepay for the year we'll offer you this 10% discount.
So if your cash flow allows that that can be a great way to record an expense in December and have it paid for starting in the New Year. Especially if you've had a very good year this year, you may feel like now is a good time to invest in the business and expense some of those things in December or the fourth quarter of the current year.
Another thing you can look at is investing your business assets. Furniture improvements whatever is a necessary and ordinary business expense in your industry you could look at buying that now before the end of the year and talk with your CPA or tax professional about that definition of necessary and ordinary business expense for your industry, but there's lots of ways you can do that before the end of the year and drive down this year's taxable income while also investing in enhancing your business.
So thanks for watching and we'll see you next time.
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