Somerset Accountant: Ending The Year With Wisdom
December 31, 2011
“It’s the little things you do that make the big things happen.”
– Mike Dooley
I hope you’re recovering from all that rest over the weekend! Well, last week, I sent you a series of blunders made by business owners — well, I’m back at it, but this time with a series of WISE moves you can make this week which will prove to return a true ROI. You see, I just finished polishing off a missive to my family and individual clients about the last-minute moves they could (still) make this week, to ensure their 2011 tax bill stays low. And I realized that similar strategies can be applied to your business, perhaps even more easily than for a family.
So I’ve put together a short (but sweet) list of simple last-minute tax moves for your business in 2011. But, if your situation doesn’t seem simple… ———————-No More 2011 Tax-Planning Openings Available 3 Last-Minute Tax-Planning Spots Cleared Last week, we were on a waitlist — but we’ve effectively cleared three appointment spots for this week, if you’d like for us to take an in-depth look at your business, and authoritatively advise you on tax strategy which can still work for 2011. Give us a call: 606-678-4372 or simply email us right back to snag your spot! ———————-
So, for those of my clients and friends who prefer to “do it yourself” (though with THIS tax code, I’m not sure that’s always wise), I’ve put together a brief, and actionable “checklist” to ensure that you’re squeezing every last drop out of the deductions available to you for 2011. Use them or lose them!
Mark Clark’s “Real World” Business Strategy
Extremely Last-Minute Small Business Tax Moves for 2011
As I mentioned to my family clients, time is short, and some moves do require more than this week to pull off — so I’m restricting myself to those items which you can realistically affect before the end of the year. And, again–these are focused on what will apply to your business. If you didn’t get that list for a personal/family return, let me know and we’ll shoot it over to you.
1) Buy Supplies in Advance How much paper, toner and other office supplies do you expect to use in 2012? Order it now so the cost is deductible in 2011. Buy what you think you’ll need for the coming year, as long as you have the space to store it. A word of caution: Under a 12-month rule, you cannot deduct prepaid expenses that run more than the end of the year following the current year. For example, if you prepay a three-year subscription to a trade journal, the cost is deductible over three years.
2) Work Now, Bill Later Instead of sending an invoice immediately so you’ll receive payment this week, consider waiting until next week. This will ensure that payment is received in 2012, and taxes on the income are deferred for another year. However, if you expect to be subject to the alternative minimum tax (AMT) in 2011, it may make sense to adopt the opposite approach — bill immediately to receive the income this year. The income will be taxed at no more than 28 percent under the AMT versus a regular tax rate of up to 35 percent.
3) Get Ahead On Vendor Costs You may have bills piled up that are not due until 2012. If you pay them now, you can deduct the expenses in 2011. Don’t have the funds in your bank account at the moment? Consider putting the expenses on your business credit card if the vendor or other party allows it. Costs charged to a MasterCard, Visa or other major credit card before the end of the year are deductible this year even though the credit card bill isn’t due until 2012.
I do hope these help — and remember that we’re always here to help!