In case you missed the call I hosted this year on the 3 tax saving actions to take before the end of the year, here's a summary of the content. In the event that it's too late for you to take action before the end of the year, use this as a guideline to get started early for next year.
It’s safe to say that if you are in business for yourself, you'd rather put money that would go to the government for taxes into your own business or into your family's bank account, right?
The problem is, most of us don’t know how or we procrastinate too long to take advantage of tax saving strategies that can make a big difference on your bottom line.
If you’re ready to save money – be ready to act now. You can literally save thousands on your taxes by implementing these three simple actions before year end.
1. Meet with your tax advisor now – in the new year is too late.
Be prepared to provide year-to-date income and expenses PLUS projections for both through the end of the year. Make this appointment now so there is still time to strategize and implement.
If you miss the year-end deadline because you don’t have a tax advisor yet, use this as your incentive to get that relationship in place now so you can strategize next year right from the start. The best time to meet with your tax advisor is once in the summer months to pre-plan and then again at the end of the year to strategize your tax savings.
2. Open the right kind of retirement account and/or a Health Savings Account (HSA).
Pay yourself via your company payroll as a W-2 employee and then you can take maximum advantage of retirement account savings. While you don't need to fund your retirement account now, you do need to open these accounts before the end of the year if you want to be able to fund them with tax-free income that will impact this year's taxes. You'll have up until 4/15 to put the money into your account.
Talk to your tax advisor to find out what kind of retirement account is right for you now that you are in business for yourself. If you qualify for a Health Savings Account (you’ll need a high-deductible health insurance plan that is HSA qualified), get that open now, even if you don't fund it immediately.
3. Live like an entrepreneur.
Consider how to maximize your deductions this year or whether to push some off into next year (if next year will be a bigger tax year) and do things like:
- Hire your kids – Shelter up to $5,950 by hiring your kids in your business and they don't pay taxes on that income.
- Invest in development – Hire a coach, bonus your team and/or have an end of the year party for your clients to get your income down this year for tax purposes while building long-term value that will result in increased income down the road.
- Transform out-of-pocket expenses into deductible business expenses – Structure them wisely, such as getting yourself booked to speak in the next place you want to take a vacation.
YOUR NEXT STEP:
For my personal guidance on your next steps and the wisdom, advice and hand-holding you need to take your business to the next level with the right foundation and support. (be sure to see all the details here).