What Do I Need to Prepare for Tax Savings At Year-End?

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Hey Small Business Owners! In this episode, we're going to be talking about what you need to do in order to prepare for the end of the year. Specifically, we're going to be discussing things like salary calculation, charitable contributions, recordkeeping, and maximizing deductions.  Make sure you're doing your homework and getting ready for the end of the year.

[00:00] Small Business Tax Tips for Year End

• If you're taxed as an S corporation, make sure you're taking a reasonable salary and paying self-employed health insurance premiums.

• Before December 31st, be sure to review your year-end tax strategies, including yearend salary and health insurance deductions.

• Make sure your payroll provider is aware of any changes to your self-employed health insurance premiums.

[04:04] Underlooked Strategies to Increase Deductions

• There are specific things that an accountable plan must include in order to be considered valid, such as adding health insurance to your W2 and finalizing reimbursements.

• Maximizing deductions can include trading business purchases for tax breaks, but only if the purchase is necessary for the business.

• Hiring family members in your business can be a great way to reduce taxes and support them at the same time.

[07:44] How to Maximize Business Deductions and Write-Offs

• Mike reminds us of some key points to remember before year-end, including establishing or funding a retirement plan and taking care of business gifts.

[11:12] Ways to Prepare your Bookkeeping

• Make sure you're completing any charitable contributions of either cash or property or goods.

• Remember to take advantage of charitable deductions if you're not itemizing, and to complete your bookkeeping up to date.

• Start to file various tax documents and receipts as you receive them.

[14:51] Essential Planning for Filing Taxes

• Make sure you're paying a reasonable salary before year-end. This salary needs to be completed before year-end.

• If you're thinking about funding a set IRA or a solo 401k, make sure you're factoring that into your salary calculation.

[18:09] Closing Segment

• Final words

Key Quotes

“When we talk about maximizing deductions, we're not necessarily talking about going out and buying things you don't need. But rather, we're talking about how can we move after-tax spending money that you're already spending.” – Mike Jesowshek

Resources Mentioned

Blog Posts:

•  https://www.taxsavingspodcast.com/blog/what-is-a-reasonable-compensation-for-an-s-corporation-owner
• https://www.taxsavingspodcast.com/blog/how-does-the-deduction-for-self-employed-health-insurance-work
• https://www.taxsavingspodcast.com/blog/why-should-i-hire-my-kids-in-my-business 
• https://www.taxsavingspodcast.com/blog/how-can-i-maximize-business-deductions-and-write-offs

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join Our Tax Minimization Program: https://www.taxsavingspodcast.com/tax

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