As a timely reminder I wanted to throw down some general company tips to get your barn in order for the annual tax man.

• Purchase business assets before year end and take advantage of the (up to) $108,000 section 179 deduction.  See details at http://www.irs.gov/publications/p946/ch02.html#d0e2333.  I bought a computer at 11pm on December 31 once.  Good stuff.

• Defer income to next year.  If you are on the accrual basis, delay your billings.

• Prepay expenses this year.  Expenses on a credit card are deductible in the year charged (not paid), and if you are on the cash basis, paying your bills with cash early will get you a better deduction.

• Write off your client accounts that are uncollectible.  You get no tax benefit from waiting.

• If you are on the cash basis, pay out employee bonuses before year end.  If you are on the accrual basis, you will get the deduction even if you don’t actually pay them until next year

• Issue 1099 forms to your contractors.  If you paid anyone more than $600 for services, you will need to follow the instructions for issuing those forms.

• Have the company contribute to your 401k plan if you have one.

• If your company is going to have a loss as an S-Corp, LLC or Partnership, review your basis in the company with your CPA so that you can take advantage of the loss personally.

• Clean up your books for year end.  Hire a bookkeeper to clean it up, they are much less expensive than the tax accountant/CPA.

Feel free to contact me with questions, complaints go to the IRS!

Mike Sowinski, CPA

www.cfoconsultants.net