Ah December, that wonderful time of year. No not the holidays, year-end tax planning! We get a lot of questions about what someone’s friend’s brother’s cousin’s accountant told them they should do to minimize their taxes, so we thought we’d take this opportunity to throw down some Do’s and Don’ts:

DO: Call or email your accountant and have a quick discussion about what you’ve been up to all year. Did you start a new project? Sell some stock? Many of these adventures have tax consequences that could benefit from taking action before the end of the year.

DON’T: Expect them to read your mind or assume that they know about your huge windfall of Twitter stock profits because you tweeted about it once in June. Nobody likes surprises or estimated tax penalties, especially not accountants.

DO: Have a discussion with your accountant about whether it makes sense to purchase new equipment before the end of the year to get the tax deductions.

DON’T: Play the business version of “Brewster’s Millions” and buy things you don’t need just to get the deductions. Your year-end purchases should be just as well thought out as your mid-year purchases. It doesn’t make sense to spend a dollar to save 30 cents.

DO: Keep in mind any future financing needs. While it’s great to minimize your tax obligation (and we can help you save as much as is legally possible) it’s also important to remember that banks look for strong cash flow and profits when they make lending decisions. Showing strong earnings is important if you need to get a mortgage, a loan for a vehicle, etc. in the near future.

DON’T: Forget that if you’re paying taxes, it means you made money, which is part of why you started this business in the first place, right?

Not sure what to do? Still have questions? Give us a call or send us an email!