| As we roll towards the end of 2006, you are probably | | | | took a look at it, you would think the company was |
| thinking about the holidays and gifts you need to buy. | | | | nearly bankrupt. Why? A business that plans ahead will |
| Well, it is also time to give yourself a tax gift. | | | | use all available cash to pay for expenses in an effort |
| Take Expenses Now To Limit Your 2006 Business | | | | to "buy down" their profit. A company that otherwise |
| Taxes | | | | might show a $100,000 profit for the year suddenly |
| Take a moment to think back to last April. Do you | | | | shows a $10,000 profit. Of course, it may also have a |
| remember the anguish of writing a check to the | | | | bevy of new equipment, office supplies and so on. |
| Internal Revenue Service? Did it seem a bit more than | | | | So, what areas should you focus on? Well, every |
| it should have been? Did you have to scramble to put | | | | business is different, so you need to consider the |
| together the funds? If you do not recall, go check the | | | | nature of yours. Try to focus on expenses you know |
| ledger in your check book or your accounting system. | | | | will come up in January and February of next year. |
| Bring back bad memories? If you want to avoid this | | | | This can be the most basic of things such as office |
| situation again, you need to start following the simplest | | | | supplies to more complex expenditures like new office |
| of tax strategies. | | | | equipment. Make a list of these items and determine |
| A time-tested and incredibly effective tax strategy is | | | | what you can buy now instead of next year. |
| expensing everything you possible can before the end | | | | Importantly, make sure you understand how much |
| of the year. Now, the expenses need to be legitimate, | | | | cash you will need in January so you don't have cash |
| but you can do some serious positive damage to your | | | | flow problems if you over expense. |
| tax bill next year if you take this step. Remember, | | | | If you want to limit the damage of your tax bill in April, |
| legitimate business expenses reduce your gross profit, | | | | the time to act is now. Taking such action is like giving |
| which results in a reduction of your tax bill. | | | | yourself a nice gift, but you have to wait till April to |
| Most small businesses have a very interesting balance | | | | open it. |
| sheet around the end of December each year. If you | | | | |
