End of the year finances can really trip people up. Often we think, “I’ll just wait til January to make any changes” Or I don’t need to worry about taxes ’til at LEAST February. Well, the truth is…there are a lot of things we can and should do in December. But don’t worry, we’ve made a list of tax prep you can do starting NOW. So, keep reading to save money!

Defer Income

Delay receiving some of your income until 2024.  You can do this by waiting to send out December invoices until January, or letting customers know they can wait until January to pay for December services. This will lower your income for 2023, which will lower the total amount of taxes you’ll have to pay.

Prepay Expenses

If you have recurring monthly expenses (like rent, subscriptions, etc.), go ahead and pay the January and February amounts in December. You can also pay for any one time expenses (i.e. education courses or retreats) in December, even if they won’t take place until 2024. This is another way of lowering your current year net income, which will further lower the amount of taxes you owe on your next tax return.

Contribute to Retirement & 529 Accounts

As a business owner, you can deduct contributions to certain retirement plans. I’m gonna go into some detail here but if you’re lost DON’T WORRY you can book a call with us and we’ll explain it ALL. 

You can contribute up to $6,500 to a traditional IRA for 2023. If you have an SEP IRA, you can contribute the lower of either 25% of compensation or $66,000. For an SEP 401-K, you can contribute up to $66,000 in 2023. It’s important to remember that SEP contributions are limited to compensation of $330,000. For SEP purposes, you calculate your compensation as your business net income minus your contributions to your SEP IRA and half of your self-employment taxes for the year. 

529 plan contributions can also help you save on taxes. A 529 plan is an education savings plan that can be used toward college expenses or private school tuition. While you can’t deduct contributions to the plan, the money in the account grows tax-free, and you won’t pay taxes on money withdrawn from the account. Some states also allow deduction for contributions to their state plan. 

Gather Your Tax Documents

While some documents (like W2s and 1099s) won’t be available until January, you can still collect the ones that you already have. This includes things like receipts for major purchases, property tax statements, mileage, phone and internet bills, and receipts for any home office expenses. 

Are You Serious About Saving Taxes?

It’s time to learn legal tax loopholes and stop overpaying on taxes! Our tax team lives and breathes tax code and they’re bursting at the seams with knowledge. With their expertise, you’ll have a customized tax planning strategy that will save you THOUSANDS. Prepare to have your mind blown.  We have found an average of $49,124 of tax savings opportunities for our tax planning clients.  Sound exciting?  Book a Call to see if this package is right for you.  (Note: This package best for people making $100k or above annually) Book Now

Update Your Books

Remember, up-to-date accurate books means that we’ll catch more tax deductions. So if you haven’t already, get those books updated! Luckily we’re not just a tax firm, we’re also an accounting firm, and we have a plethora of bookkeeping options – DIY, VIP, Quarterly, Monthly, and CFO. You can find more information here. 

Find a Preparer

Although your tax return isn’t due until April (or March, if your business is a corporation), tax season really starts in January. Many preparers will be booked for the season pretty early, so make sure to contact your tax preparer soon. 

Lucky for you, you already know the best tax team around and we’d love to work with you this upcoming tax season! This is just a taste of what we have to offer. So let’s chat and find the best fit for you. Book a Discovery Call here

TTYL, Patton Accounting and Tax