Now is the time to take a look at your business and see if there is anything you can do to save money on your taxes for 2007. Once January 1st hits it may be too late for many of these tax saving ideas.Get Your Books In Order
Set up an appointment with your accountant and make sure everything is together. If you wait until the last minute you may forget something and potentially lose the deduction forever.
Defer Your Income
Put off as much as you can until 2008. Give your clients a Christmas present, and another 30 days before you send the bill. Next year the tax rates will be indexed for inflation and you will pay less tax.
Accelerate Your Expenses
Use credit cards to get the expense deduction while making the payment in 2008. Pay your bills early, and see if there are any large purchases you need to make.
Look at Your Investments
Did you sell stock this year and make a profit? Now is the time to see if you need to sell a few losers. You can write off all of your capital gains plus up to another $3,000 in ordinary expenses with capital losses. Just don’t buy back the same stock within 30 days.
Set Up and Contribute to Your Retirement Account
You’re not losing anything, you are just putting it away until later. You probably won’t miss it anyway, so max out your retirement account.
Make Full Use of the 179 Deduction
This year small businesses can take an immediate $112,000 deduction for purchases of equipment and software that would otherwise need to be depreciated. Whatever you don’t use this year is gone forever.
Keep Track of your Mileage
And finally, if you have a vehicle that you use part for business and part for personal, you need to keep track of your mileage. Make it a new family tradition, on New Year’s Eve, when the clock strikes twelve and the shiny ball drops, kiss your honey and then go run out and get the odometer reading off of your car. Your going to need it for next year!
Happy Holidays and a Prosperous New Year!