6 Simple Year- End Tax Tips
Following are six simple year end tax tips that can benefit entrepreneurs.
1. Shift expenses into 2014 : Make a plan of your spending. business persons or entrepreneurs typically benefit from minimizing taxes by lowering reportable annual profit. You have to ay incur the costs before the end of 2014, if your business accounts on a cash basis and expenses are due to hit early in 2015. The simply paying out cash rather than incurring a deductible expense will not reduce taxes.
2. Do a test run of business and personal tax returns. If possible according to the information that now you have available, estimate your taxes by preparing 2015 tax returns. The information from prepared test return can help to decide on strategy and tactics to take before year’s end.
3. Give to charity : The taxable income can be reduced by charitable contributions. In some cases donating the securities directly to a charity-potentially saving you significantly more on taxes than had you donated cash help to avoid capital gains taxes on appropriated securities.
4. Shift income into 2015 : If you wish to reduce taxable income for 2014 and you are accounting to a cash basis, consider billing your customers late to giving them an extra-long grace period for making payments, by this the revenue that you otherwise would have received in 2014 arrives at your desk in 2015.
5. Sell investment losses to offset capital gains : You may be able to offset stock gains with bond losses because in this year there are many stocks have gone up and many bonds have gone down. Don’t sell an investment and even don’t sell and buy back the same security quickly (you think will do well in the future just just to get the tax benefits).
6. Consult a professional tax adviser : Speak your accountant now about what taxes you might owe in 2015, so that he/she can advise you on what steps to take to minimize taxes before the year passes.