Happy HallowThanksMas.
The End is Near…. Just kidding. But kind of. Year end can be a big time of transition for business owners and there is also some pre-tax work that needs to be done to ensure you can file on time and maximize your tax savings. If you plan now, January will be smooth as butter and tax season will seem less scary. This month and through the end of the year, we will hit on the high points of year end prep and give you tools and recommendations to cruise into the new year with ease. Here’s a few things on that list:
Get your books up to date. Whether this means answering any questions your bookkeeper has or managing your own books, don’t wait until the last minute. Missoula Bookkeeper has a few spots left for new clients before we put things on hold for the holidays and through tax season.
Check in with your CPA: Don’t wait until the new year. Set up an appointment or send them an email with your Year to Date Profit and Loss and Balance Sheet. Ask them for advice on things to do before year end to get your final taxable income in the prime spot. There are a few tools you can use to do this and hold onto more of your dollars.
Explore moving your LLC to an S-Corp. Different entity types have different tax guidelines and rates. Depending on your net income, being an S-Corp could save you in taxes. However, keep in mind there are some logistics and up front costs to getting this taken care of.
Set up retirement accounts. The deadline for a Simple IRA for 2023 has already passed (Oct 1st) but if this is something your financial advisor or CPA recommends, you can get that on your to do list for after the new year. Other types of retirement can be set up and funded up until the tax deadline so talk to your CPA or financial advisor about what you need to do to maximize the tax benefits.
Set up an HSA. Many business owners are getting health insurance through the marketplace and may have a qualifying high deductible plan. This means you can set up an HSA and run all of your medical and many health expenses through the account for additional tax write off.
If you haven’t already, plan and execute annual staff reviews. This is a great time to check in with our team, take the temperature on how they feel about working for you and give them constructive feedback on their performance and the goals you have for the new year.
Think about year end bonuses and cost of living raises for your team. Start planning now to get a handle on how these will affect your bottom line. For bonuses, it may be better for you to do them before Dec 31st so that it reduces your taxable income this year. In other cases, waiting until just after the new year, may be more strategic.
Another place to strategize is in your inventory. If you are a wholesale or retail business, getting your inventory down as low as possible, selling off discontinued items at a discount and holding off on any inventory purchases that you can until after the new year, will help minimize your taxable income.
Take time to enjoy your friends and family and relax over the holidays. Don’t let the chaos and stress of owning a business be the theme of your life. Rather, be intentional about how you spend your time and prioritize.
Look ahead to the new year and set some goals for yourself and your business. Create a vision of what you want your life and business to look like at the end of 2024. Write it down and put it where you can see it throughout the year.
It's hard to believe that we are already here, but we are so grateful for all of our clients and followers that have worked with us this year. Please let us know what we can do to make your holiday season and new year smooth!
“Year’s end is neither an end nor a beginning but a going on, with a wisdom that experience can instill in us.”
