Expert Tips on Year-End Tax Strategies for Small Business Owners

Nov 22, 2023

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Before you know it, 12/31/23 will be gone, and we will be in 2024.

In this episode, Mike focuses on year-end tax strategies for businesses. He emphasizes the importance of timely action for implementing various tax-saving measures before the end of the year. Key topics include prepaying expenses, managing income and deductions, using business credit cards for immediate deductions, and considering Roth conversions in low-income years. Mike also discusses strategies for supporting family members in lower tax brackets and making charitable contributions before year-end.

Leverage existing tax laws and opportunities to optimize financial outcomes by tuning in!

[02:11] Prepaying Expenses

IRS regulations contain a safe-harbor rule that allows cash-basis taxpayers to prepay and deduct qualifying expenses up to 12 months in advance without challenge, adjustment, or change by the IRS

[03:52] Stop Billing your Customers, Clients, and Patients

Customers, clients, patients, and insurance companies oftentimes don't pay until billed
Not billing customers and patients is a time-tested tax-planning strategy that business owners have used successfully for years

[05:30] Buying Office Equipment

Bonus depreciation in 2023 is at 80%, but that will be reduced each year

[07:40] Use Your Business Credit Card

You get a deduction when that item gets put on that credit card
The day you charge a purchase to your business or personal credit card is the day you deduct the expense

[08:22] Don't Assume You Are Taking Too Many Deductions

If your business deductions exceed your business income, you have a tax loss for the year
If you are starting your business, you could very possibly have an NOL

[10:11] Convert to a Roth IRA

Consider converting your 401(k) or traditional IRA to a Roth IRA, especially if you are in a down income year.

[13:34] Charitable Contributions

To get an advantage for charitable contributions, you need to be taking itemized deductions

The Time Is NOW To Start Paying Less In Taxes. Join Our Tax Minimization Program (with Stress-Free Bookkeeping Training)! Join Our Tax Minimization Program Today!

Key Quotes:

"If you're running at a loss, you can carry forward those losses to offset future income." - Mike Jesowshek, CPA

"If you know you're going to pay something, rent's a great example, insurance a great example, you're going to need accurate bookkeeping no matter what." - Mike Jesowshek, CPA

"Do not buy things you don't need just to get a tax deduction. That is a lose-lose-lose situation." - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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Podcast Website: https://www.TaxSavingsPodcast.com

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