3 Last-Minute Tax Tips for Small Businesses
We have only a few weeks to go in 2019. That seems like a small amount of time to make a meaningful improvement in your company’s finances. But in fact, you can secure a few significant tax savings even with just a few days to go.
For the record: We don’t encourage waiting until the last minute. To capture the most tax relief – whether it’s deductions, credits or exemptions – that you can qualify for, we recommend you exercise vigilance and forward planning on the tax front. And on that front, we have plenty of advice for improving your small business’ accounting in the new year.
But if you’re reading this, chances are you’re looking for some immediate help amid 2019’s final days. So here are a few last-minute tax tips for small businesses to consider:
- Accounting Tricks: Were you planning to buy some new computers, a printer or some networking gear in 2020? Don’t wait. Purchasing business equipment will actually lower your total income, which will in turn reduce your overall tax liability. You also can “push” some revenue into 2020 – if you have orders that won’t be delivered until the new year, you can defer recognizing the revenue on those orders, which in turn will lower your revenues (and in turn, your taxable income) for 2019.
- Turn to the Stock Market: Investing can provide a couple of tax savings for entrepreneurs, too. For instance, if you’re self-employed, contributing to a retirement plan such as a SEP-IRA can reduce your taxable income. For the 2019 tax year, you typically can contribute 25% of your self-employment earnings, up to $56,000 (and up to $57,000 in 2020). Another trick – one that will be especially useful amid this year’s negative turn in the major stock indexes – is tax-loss harvesting. You can sell stocks or funds for a loss – “harvesting” those losses – and in turn lower your ordinary taxable income by as much as $3,000.
- Last-Minute Credits and Deductions: Your small business might still qualify for a few deductions. For instance, if you use part of your home as your office, you can deduct some expenses based on the portion of the home you use. You can use a mileage deduction for business travel purposes – the rate is 58 cents per mile. You also can buy certain environmentally friendly equipment, such as refrigerators, and even electric vehicles, to qualify for certain tax credits.
If you need a more drastic tax treatment before 2019 comes to a close, get in contact with McManamon & Co. We’re a full-service accounting, tax, and consulting firm that focuses on small and mid-size businesses. Our accounting team can not only help you wring a few final credits out of 2019, but more importantly, we can put you in position to use all of 2020 to your tax-reducing advantage.
The tax code is complicated, but we can simplify it and put it to work for you. Call McManamon & Co. at 440.892.9088 or contact us online so we can get started today.
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