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The Year is Almost Over – Why Now is a Perfect Time to Prepare Your Taxes to be Ready

With merely a few weeks remaining in 2020, the challenge of maximizing your tax position is becoming more challenging by the day and certainly more challenging than in years past.

One thing 2020 has taught us is that no matter how prepared we think we are, life can get into the mix. I would dare to say that there aren’t many people who will be sorry to see New Year’s put an end to 2020. But before we can leave the past in the past, we have to finish this year out. With all the economic upheaval caused by COVID, many businesses have been stuck in the daily grind and unable to really strategize or plan at a high level. With merely a few weeks remaining in 2020, the challenge of maximizing your tax position is becoming more challenging by the day and certainly more challenging than in years past.

Since we only have a few weeks left to the end of the year, now is the time to really assess your company’s financial health and see where you can make things better as we head into the future. One way to get all the bang for your buck, literally, is to take advantage of upgrading your business needs to leverage against what you owe. There are a lot of ways that you can minimize the sting that usually comes with paying taxes. To this point, make sure to address these two things to come out financially ahead of the game. These are tips for your tax preparation in Mount Pleasant, SC.

Capital Expenditures

With the Christmas season comes shopping. Now is the time not only to get your mother those slippers she’s been wanting, but also to upgrade all of your business needs. If new capital expenditures are purchased and put to use before the end of the year, you are allowed to take an accelerated depreciation on many items.

That can equal a significant tax benefit for businesses who are looking to hedge against tax liability. Make it your New Year’s resolve to have your office running more efficiently with a new computer system or redecorate to impress clients. Spending feels really good, especially when you know that doing so will allow you to come out ahead financially.

Cash Basis Companies

For cash basis companies, if you have any inventory to buy and any cash on-hand, again, it is imperative that you buy before the New Year’s ball drops. Since your company is on a cash basis, you can expense all of the things you buy in 2020 to go against what you owe in April. So go for it and spend that money that is burning hole in your pocket before it is gone without anything to show.

The Benefits of Spending

Typically, spending money seems foreign, especially in a year like 2020. But with things just about to turn the corner, now is the time to maximize your capital expenditures. Take a good look at all those things that will help your business operate more cost-effectively and efficiently and invest now. Who knows what the New Year will bring. With a new Administration about to take hold, the future for businesses and taxes is very uncertain. So, do what you can now to minimize your tax payouts and maximize your business investing before we collectively say “adios" to 2020.

Contact our office to see how we can help with your tax preparation in Mount Pleasant, SC before April catches you by surprise.