Year-End Tax Strategies for Accrual-Basis Taxpayers

Year-End Tax Strategies for Accrual-Basis Taxpayers

The last month or so of the year offers accrual-basis taxpayers an opportunity to make some timely moves that might enable them to save money on their 2016 tax bill. Record and recognize The key to saving tax as an accrual-basis taxpayer is to properly record and recognize expenses that were incurred this year but won’t be paid until 2017. This will enable you to deduct those expenses on your 2016 federal tax return. Common examples of such expenses include: •Commissions, salaries and wages, • Payroll taxes, • Advertising, • Interest, • Utilities, • Insurance, and • Property taxes. You can also accelerate deductions into 2016 without actually paying for the expenses in 2016 by charging them on a credit card. (This works for cash-basis taxpayers, too.) Accelerating deductible expenses into 2016 may be especially beneficial if tax rates go down for 2017, which could happen based on the outcome of the November election. Deductions save more tax when tax rates are higher. Look at prepaid expenses Also review all prepaid expense accounts and write off any items that have been used up before the end of the year. If you prepay insurance for a period of time beginning in 2016, you can expense the entire amount this year rather than spreading it between 2016 and 2017, as long as a proper method election is made. This is treated as a tax expense and thus won’t affect your internal financials. Miscellaneous tax tips Here are a few more year-end tax tips to consider: • Review your outstanding receivables and write off any receivables you can establish as uncollectible. •...
Year-End Accounting Tips to Start Your New Year Right – A Complimentary Webinar

Year-End Accounting Tips to Start Your New Year Right – A Complimentary Webinar

Your business’ year-end closing procedures are vital to the success and organization of your company. One of the most important parts of your year-end procedures is closing the books. You need to start each new year with a clean, fresh slate that is organized and correct and will set you up for success right from the start. Whether you have an in-house accountant or not, some of your year-end accounting procedures will need to be reviewed and taken care of by audit and tax experts. Often companies make significant mistakes throughout the year and while completing year-end procedures, and these mistakes can be very costly in terms of money, time, and overall efficiency of the company. With pre-planning and organization, year-end closings can be stress free and help reduce tax preparation, time and costs. Join Jim Wyatt and Carrie Fortier, CPA from Jones & Roth CPAs and Business Advisors on December 4th to learn more about year-end accounting procedures and how to prepare for the new year. This one hour free webinar will be held on Friday, December 4, 2015 from Noon –...