As we come close to year end, pay attention to any tax moves you may want to make in your Personal Finances or Business situation.
A common tax tip for a business owner is “buy equipment.”
But before you do that, here are two things to keep in mind:
If you actually NEED that equipment, it serves a valid business purpose, and it will:
- a) increase revenue,
- b) decrease expenses, or
- c) save time
Then go for it!
But if it doesn’t meet those tests, skip it. You’re probably better off paying the taxes and keeping your cash.
Some other strategies to consider:
- Year-end charitable donations and/or funding Donor Advised Funds if you plan to benefit from itemizing your [personal] deductions this year.
- Roth IRA conversions if you are having a lower-income tax year and want to have more of your retirement money growing Tax Free
Sometimes you are better off paying the taxes and keeping your cash.
And if you are wanting to make any contributions (not conversions) to your pre-tax IRA, Roth IRA, HSA or Solo 401K; rest assured that those moves can still be done after year-end, so don’t rush to do those in a panic by Dec 31.