With tax season bearing down upon many small businesses and organizations, planning for the year ahead probably is not the number one thing on your to-do list. Staying engaged in your tax planning year-round however, is one of the best practices for maximizing deductions and ultimately saving money long-term.
So what can you do to stay ahead of the game? After all, Americans spent almost 9 billion hours on federal tax preparation in 2016. Here are three great options you should consider in order to get a head start in 2017.
1. Charitable Donations
Keep track of all the contributions that your business has made to 501(3)(c) tax-deductible organizations. While some of the larger financial contributions are easy to remember and file, smaller ones like donated items, products, and services are often overlooked when tax season comes back around. Donating to charity is also a great way to improve your reputation in the community, so why not maximize your tax breaks at the same time?
2. Business Growth & Advertising
Utilizing your capital to both grow your business, as well as plan for the next year’s tax filing is a smart way to work. As defined by the IRS, a necessary expense is one that helps the business succeed but isn’t necessarily mandatory in order to be deductible. Choosing to put money into marketing and advertising, and then deducting the cost as an ordinary business expense is a great way to increase your business presence while preparing for next year’s tax deductions.
3. Retirement
Retirement planning transcends smart yearly tax planning and ties directly into your future finances. Making specific contributions to your retirement accounts is a tax-deductible way to plan long-term. On top of that, there are numerous other tax-based benefits to consider when it comes to running your business.
Attracting quality employees is a huge factor in the business world of today. Consider talking with a tax professional to help set up a tax-deductible retirement contribution plan for your employees. Not only will this help you attract highly qualified individuals, but will also be seen as an investment in your current employees.
Getting a head start on tax planning for next year is a great way to alleviate some of the stress associated with tax season. Maximizing deductions while also preparing for the future of your business go hand in hand. Please contact us to discuss other ways that you can take your tax planning strategies to the next level!
