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Year-End Tips for Business Owners

If you own a business, the end of any year is a good time to review your practices and examine ways to become more efficient and profitable. Check out these considerations:

The Taxman Cometh

If you are a sole entrepreneur or own an S corporation, you may want to shift income to 2019 if you expect lower income then. Companies that pay bonuses to employees may want to look at income projections to determine whether to give them in December or January.

Don’t forget that you are not only an employer, but an employee, too. If you have a 401(k) or other deferred compensation plan, you might also want to contribute more tax-qualified dollars to the plan before year-end.

Also, don’t forget your company may be responsible for filing IRS 1099 forms for independent contractors you’ve paid and employment taxes such as for federal unemployment insurance (FUTA). And, if you’re self-employed, you’ll have to pay self-employment tax.

Take Account

The end of year is a good time to take a long look at how you do business. Check your accounts receivable for laggards, and work out a system to get paid more quickly if you find late payments are a problem.

Avoid IRS penalties for payment mistakes and late filings, and review the compensation and benefits you offer employees, including life and health insurance. By now, you should be in the middle or toward the end of completing your financial reports and gathering any receipts you’ll need.

Take Action

If your end-of-year accounting shows some flaws, act to correct them. Consider taking a big-picture look at your company to look at the financial, sales, marketing and other aspects of business.

Review your tax strategy. If you need more tax deductions, this is a fertile time of year to find them. Check your tax strategy to ensure you put away the proper amount. Look at your sales and marketing efforts and put more money into them if your review of them indicates this will help.

Talk to your advisor and tax professional to learn more.

Source: Loose Change - https://e.loosechangenewsletter.com/schwartzfinancial/2018NovDec/Year-End_Tips_for_Business_Owners