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Showing results for tags 'end of year tax strategy'.
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Typically, at the end of the year, tool reps and other sales people will try to sell shops tools and equipment with the pitch to make sure you get all your write-off deductions in by the end of the year. While this tax strategy can reduce your taxable income, thus reducing the amount of taxes you owe, you need to discuss any purchase with the purpose of using it as a write-off with a qualified accountant first. Reducing taxable income through ligament write-off deductions can in many cases also reduce your cash reserve. Cash is king and sometimes paying taxes and maintaining cash reserve is the smarter decision. Everyone wants to reduce their business and personal income tax. But, please discuss with your accountant any purchase that may impact cash reserve. Obviously, if you need a particular tool or equipment to operate your business, that’s different.