As the holidays are quickly upon us, I’m sure the last things you are thinking about are your taxes. But taking a moment to assess your tax situation NOW could pay off big in 2010. Here are some year-end tax tips that could drastically change your tax situation.

Tips for Business Owners:

• Get Current. One of the most important tax tips I can give is to make sure your accounting is up-to-date. It is important that you have a complete understanding of your financial situation. Scheduling a year-end planning session with your accountant is a good idea and a good start.
• Procrastinate. I know this may sound crazy, but hear me out. If (and only if) your cash flow can sustain it, then wait until January to bill those end of the year clients. Any cash you receive in December must be included on your 2009 tax return as income, but if you wait just a few more days you can defer payment of taxes on that income for another year.
• Shop ‘til you drop. Purchase items that your business will need in the near future. Again this is if your cash flow permits. Some things you should consider are office supplies, equipment purchases or pay some bills early (i.e. business cell phone bill, utilities, etc). This year the sales tax and excise tax charged on qualified motor vehicle purchases is deductible.  So if you are in need of a new vehicle, it would be beneficial to do so by year end.
• More blessed to give. We’ve all heard the saying, “it’s more blessed to give than to receive”. And it’s true in more ways than one. Push an early 2010 charitable donation back to 2009, which allows you to take the deduction in 2010 instead of waiting until 2011. Be sure you get a receipt to support the tax deduction.
• Sock it Away. This is a great time to make payments to your retirement plan or setup one to reduce your business income before the year ends. Meet with your financial planner to verify the contribution limits and deadlines.

Tips for Individuals:

• Job-related moving expenses
• Job-skill improvement classes (including travel)
• Professional and investment publications
• Union or professional dues
• Job-hunting expenses (including travel)
• Child care expenses
• Home office deduction – working from a home-office
• New or used clothes, toys, and household goods given to charity
• Fees for tax or investment advice and tax return preparation
• IRA fees
• Client gifts

Note: These year-end tips will apply differently to each individual’s situation and accounting method. Seek professional advice to determine the best strategy for your transactions for tax purposes.

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With the unemployment rate seemingly rising everyday many are being “forced” into entrepreneurship.  Most business owners would agree that business ownership is not for everyone.

No matter how you got there, I just want to help keep you there.  My goal is to KEEP SMALL BUSINESS IN BUSINESS.

Join us for a FREE teleseminar.  We will share the reasons “Why Businesses Fail and How Yours Can Succeed!”

Tuesday, September 9, 2009 @ Noon EST

Register

When starting a business there’s always a great deal of uncertainty that goes along with selecting the right entity type.  A business owner is unsure of whether or not they should be a sole proprietor, incorporate or form an LLC.

The purpose of this Club Call is to share the differences between each entity type and help you determine which type is right for you.  Join us for the power packed hour and leave a more informed business owner.

This call is open to all Club BTB members.  So if you haven’t joined yet….WHAT ARE YOU WAITING FOR?  Club BTB is only $1 for the first 60 days and IF you decide to stay, it’s $47/month.  How can you say no to such a value???

Note:  We will provide a replay to all club members with 48 hours of the live event.

JOIN TODAY

12 Common Bookkeeping Mistakes to Avoid

1. Commingling funds – So many business owners are guilty of either using the business account to pay for personal expenses or paying business expenses through the personal account. This is a big NO NO!

2. Misclassifying workers – Times are tough and staffs are getting smaller and smaller. Many business owners are classifying workers as independent contractors when they really are employees. This mistake can shut your business down.

3. Not reconciling books to bank statements each month – This is a practice that should be done each month. It ensures that all charges on your bank statement are legitimate and it also ensures that all charges on your bank statements are recorded in your books.

4. No backup – A paper trial of documentation should exist for all computer records. Technology is a wonderful thing when it works. Telling an IRS audit that your computer records were stolen or lost in a fire will not be sufficient.

5. Miscategorization or over categorization – This occurs when expenses are either recorded in the wrong category or there are too many categories created.

6. Improper use of petty cash – A system must be put in place where a set amount of money is placed in the petty cash fund and accurate records of expenses and replishments are recorded.

7. Missing deadlines – Filing returns late can create unwanted penalties and interest.

8. Excluding startup expenses – Failing to keep accurate records of the expense incurred prior to opening the business doors. These expenses are often time paid from the personal account and are often times overlooked.

9. Including equipment purchases with supplies – Equipment is a capital expenditure, and capital expenditures have to be depreciated, which means they get written off over several years.

10. Improper auto expenses – There are many options for calculating deductions when you use your car for business. (Actual expenses OR mileage)

11. Claiming too much for gifts – You may claim gifts given to your client but keep in mind that you can only deduct $25/per client/per year. So if you give a $50 gift you can only deduct $25/per client per year.

12. Writing checks out of sequence - Writing checks out of sequence opens your business up to theft from employees or vendors. 

Have you heard a tip that you didn’t know about?  Which one?  What are you going to do to clean up your books?  We’d love to hear from you.