7 Tips for a Tax Advantageous Q4

[Julio Gonzalez]

It’s coming up on the end of the year and with the uncertain economic circumstances, it’s crucial to have a firm grasp on your business’ financials. Here are 7 tips to take advantage of in Q4 to help successfully close out the year.

1. Connect with your Financial Advisors, CPAs, etc.
   1. Don’t wait until it’s tax season when your CPA is the busiest to try to connect. It’s a great idea to be in contact with your CPA and advisors throughout the year. Your CPA is one of your most valuable assets, so ensure you are utilizing them to the full potential.
2. Understand your numbers.
   1. Do you currently utilize key performance indicators (KPIs) to track how your business performed/is performing? If you aren’t setting goals and tracking how your company performed against those goals, it’s hard to know where you’re doing good and which areas need improvement. Ensure you are reviewing your financial projections on a regular basis and make any adjustments as necessary.
3. Evaluate your current technology solutions and consider upgrading.
   1. The accounting and financial industries have been seeing tremendous innovation when it comes to technology. New software can make things smoother, easier, more organized and faster. While switching to a new software or changing up processes can be daunting, it could help you save so much time in the long run. Tech helps create efficiencies and prevent errors. If you are still using an old technology line up, you may be wasting a lot of effort, time and…paper!
4. Take advantage of all available tax deductions.
   1. There are many great tax credits such as charitable contribution credits, green tax credits, real estate tax and employment tax credits. While your CPA may be able to help you take advantage of many tax deductions, the tax code is massive and constantly changing thus your CPA alone may not be able to help you find all of your available deductions. This is where I recommend working with a specialty tax credit firm. They can help you take advantage of some of the more complex and less-known tax credits such as cost segregation and R&D tax credits.
5. Monitor your cash flow.
   1. Positive net income alone does not determine whether or not a business is successful. A key factor is that a business also has a healthy cash flow. You should have a 1 year cash flow projection at a minimum and track your cash flow each month to see if it’s in line with expectations. You’ll want to track inflows and outflows and pay special attention to payable and receivables.
6. Implement a plan.
   1. If you fail to plan, you plan to fail. As we head into the new year, ensure you have next year’s budget, your business goals and details on how you will achieve those goals, cash flow projections with details on if you’ll need to get funding and if so, at what point, and last but definitely not least, your tax strategy.
7. Utilize strategic spending to save money on taxes.
   1. Review your expenses to determine whether you may have missed something that could qualify as a tax deduction. Your CPA should be able to help you with this as well.

What are you doing to wrap up Q4?