Uncle Sam looks forward to the end of the year. He knows you are too busy to plan ahead to reduce your tax bill. Not you, not this year, because you took the time to read this article.
As an entrepreneur you work too hard all year long to keep losing money to Uncle Sam.
Any good accountant, tax preparer or even most business accounting programs can project your net income and taxes. Use the time between now and the end of year to change that number and get back some of what your Uncle has taken from you all year long. Consider some of the following options to reduce your tax bill:
- Pay any open invoices for goods or service before the end of the year, even if you need to use a credit card or a line of credit;
- Pay your mortgage payment or lease payment before the end of the year;
- Pay any states taxes;
- Invest in yourself and pay for professional education and development for next year. (Check out www.darrenhardy.com for some great options for professional development.)
- Prepay your child’s tuition;
- Prepay your insurances;
- Put money into your retirement account;
- Take advantage of any prepayment discounts; and/or
- Make those equipment or vehicle purchases you have been contemplating for the past year.
Check back next month for suggestions on how to handle the always challenging question of Christmas bonuses.
The use of independent contractors is still a good idea, but be certain to follow the rules.
From all of us at Main Street Development and Addis Law offices, we wish you a Prosperous 2020.