7 Year-End Tax Tips for Your Business

Taxes aren’t due until April, but that doesn’t mean you shouldn’t start preparing your company for them now. There are a lot of things you can do in the next few weeks to earn a bigger refund – or at least decrease the amount you’ll owe. 1. Defer income. AllBusiness recommends you defer income until after the first of the year. “If you are self-employed, for example, send the last invoices out late in December so you will more likely receive payment in January,” it says. 2. Write off inventory. Check your company’s inventory for products that are damaged or obsolete, suggests consultant Darrell Zahorsky at About.com. “The drop in market value of the inventory can provide your company with added deductions,” Zahorsky says. 3. Purchase office supplies. You have to buy everything from paper to computers sooner or later, so you might as well make those business purchases in the final weeks of 2009 in order to take the tax deduction in April. Does your company need a new vehicle? That’s deductible, too. 4. Take advantage of 50 percent first-year bonus depreciation. Your company can claim 50 percent first-year bonus depreciation for certain new equipment and software that you put in service by the end of the year, according to Bill Bischoff at SmartMoney. 5. Add to your retirement plan. “This is a great time to make payments to your retirement plan or set up one to reduce your business income before the year ends,” says accountant Bernadette M. Johnson-Hairl. 6. Be aware of the rules for the self-employed. Not all business tax laws apply the same. Do your research and consult with tax experts about what applies to you if you don’t have an employer. For example, “You may be delighted that the first money you receive as a self-employed independent contractor is a flat fee without any taxes taken out,” says CPA Michael Rozbruch. “But your joy should be short-lived; this is a case of the taxman being delayed but not denied.” 7. Donate to a charity. Not only are charitable donations tax-deductible but they are also an excellent PR move for your business. ’Tis better to give than to receive, they say!