As a tax accountant in Orlando, I know that establishing a business requires a lot of commitment and passion. If you are a business owner, you may be struggling (if you are at initial stage), but bear in mind, the entrepreneurial journey is lucrative. Being a business owner, you need to look after all your business operations and overall management. You need to properly operate all the departments in order to function efficiently. But, no one is an expert in every field. Similarly, you will require hiring experts to help achieve your departmental goals.
Among all the departments, accounting is one of the most complicated departments. This is because the department handles book keeping, financial statements, accounting records, cash management, and complex taxation matters. The taxation documentation is difficult to handle because it involves certain technicalities. Taxation matters become especially complicated at the end of the year if not handled well throughout the year. But if you have hired, a tax accountant in Orlando, then you need not worry.
This article contains end of the year tax tips for your business with respect to tax accountants in Orlando.
How does a Tax Accountant in Orlando help?
A tax accountant in Orlando can help you in solving all your taxation problems. They are responsible for your tax planning. Their prime objective is to present the facts and figures in such a way that you get to pay the lowest taxes.
Whether you have suffered from losses or generated profits throughout the year, your tax accountant in Orlando ensures to make a savvy move, before the end of the year. They manage all your dividends, capital gains, and funds, so that you can enjoy the whole year’s worth of income.
End of the Year Tax Tips for Small Business Owners
Your tax accountant in Orlando ensures to act before December 31 to increase your tax breaks. Usually, there are three common ways for tax planning, reducing income, take tax advantage, or increase deductions. But, there are several other ways to manage taxes. Your tax accountant in Orlando will choose the way which suits your business.
Some of the year-end tax tips, for small business owners are prescribed below in regards with the tax accountants in Orlando.
1. Reduce Your Income
You definitely would not like to pay higher tax bills next year at the cost of additional income. Your tax accountant can help you in paying lower taxes. They will accelerate deductions in the current year and reduce income into the next year. In this case, they will lower your adjusted gross income (AGI). This is because; AGI affects your tax rates, tax credits and other taxation particulars.
AGI can be determined by deducting your adjustments from total income. Therefore, the greater your income, the more taxes you’ll need to pay. One of the best ways, often chosen by tax accountants in Orlando, is to contribute the amount to a retirement account. Furthermore, another possible way is to reduce the income by accelerating more deductions. In this regard, tax accountants in Orlando can make adjustments in student loans, contributions to the IRA, alimony and other similar expenses. Tax accountants in Orlando will choose the most appropriate way to reduce your income.
2. Accelerate Deductions by Itemizing
Various expenses can be deducted if they exceed a certain limit of adjusted gross income (AGI). In this case, tax accountants in Orlando itemize deductible expenses. They consider your non-urgent expenses, such as health care, charity gifts, local taxes, costs related to investments, tax preparation fees, property taxes, and many others.
Once these expenses are itemized by the tax accountants in Orlando, they compare them with the standard deductions and choose the one with higher value. However, the standard deduction is dependent upon your filing status and number of dependants. You can raise your standard deductions by getting married or by increasing the number of dependants.
3. Benefit from Tax Incentives
The third strategy used to bring down taxes is utilizing tax incentives. There are several tax incentives that can be used. You tax accountant in Orlando will help you in choosing the most appropriate tax incentive. They will not only choose the suitable one, but also make use of them to lower your tax level.
4. Leverage Retirement Account Tax Savings
Retirement accounts offer some of the best tax savings. This is due to the contribution in the taxable income. Your tax accountant in Orlando ensures to increase your contributions to an appropriate retirement account. You can either contribute in the traditional retirement account, 401 (k) or individual retirement account.
Both of them can lower your taxable income. The contributions in the retirement account don’t let you pay taxes until you take the money out of the retirement account. However, it benefits you in reducing your taxable income at the time of contribution.
5. Consider the Roth IRA Rollover
Conversion of a traditional IRA into a Roth IRA (a retirement plan under US law which is not taxed on the basis of certain conditions) is trending these days. Your tax accountant in Orlando can help you out with the conversion of the IRA. This kind of rollover permits you to pay taxes on the conversion, in exchange for no taxes in the future.
Whenever you convert your account, you must re-examine your rollover. If the value goes down, you have deadline until your extended filing to reverse the conversion. This will permit you to pay lower taxes and convert later.
6. Look up to Overall Finance Structure
Your tax accountant in Orlando assesses your year-end financial situation and planning for future. They keep an eye on the cash inflows and outflows, retirement, health care, investment and estate planning. It is also necessary to check the changes in the wills, health care proxies, and powers of attorney during the year. They reconsider employment-sponsored programs using the open enrollment period to reduce next year’s taxable income.
Being a business owner, you must consider these tips and beware of the tax breaks at the year-end. Your tax accountant in Orlando can help you in a savvy move before the end of the year because they believe it’s never too late or too early to plan for the future.