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Year-End Tax Tips for Businesses

For business owners the close of another year means it’s a great time to tackle some year-end to-dos that will help with taxes come April 15.

Below we have compiled some tips to check off your list before the ball drops at Times Square, or at the very least, to be sure you don’t miss for 2014.

  • Throw a holiday party. Many holiday parties for employees are tax deductible as are gatherings for clients and associates.
  • Evaluate for accuracy your balance sheet, profit and loss, and general ledger, as well as your accounts receivable and accounts payable. Reconcile your bank and credit card accounts and write off bad debts from nonpaying customers.
  •  Take advantage of tax deductions by making charitable donations. The holidays are a great time to contribute to a worthy cause, and donations need not only be monetary. Donations from a toy or clothing drive in which your employees participate are also deductible for fair market value. Join this approach with your marketing program by selecting local charitable causes.
  • Submit expense account receipts for employees and yourself prior to Dec. 31 to benefit from  deductions for reported business expenses.
  • Take a look at your subcontractor data. Those paid more than $600 a year including attorneys must be sent a Form 1099 by January 31, 2014 if you’ve not already done so.
  • Speaking of maximizing deductions, year-end is the time to buy things your business needs such as new equipment, office furniture or supplies.
  • Review your personal expenses to see if any business expenses have been paid via personal funds. If so and your business is a sole proprietorship or partnership, locate the cancelled checks or receipts and add these expenses to your company’s books.

For additional information maximizing your business’s tax advantage, contact James A. Jacquette, Esq., a partner with Timoney Knox. Mr. Jacquette focuses his practice on estate planning and administration, family law, and municipal law.

Sources:

Fox Business Small Business Center, by Bonnie Lee, 12/6/2013

LuAnn Capital, Seven Tips for Your Year-End To-Do List, 11/13/2013

About.com, 7 Year-end Tax Tips for Small Business, by Alyssa Gregory

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