As 2024 winds down, here are some tax tips to help you prepare your business for filing your upcoming tax return.

Tax tips for business

• Informational returns. Identify all vendors who require a 1099-MISC and a 1099-NEC. Obtain tax identification numbers (TINs) for each vendor if you have not already done so.
• Be prepared to receive Form 1099-K. You may receive a Form 1099-K from each payment processor from whom you’ve received a payment. In addition to credit card companies and banks, payment processors can include Amazon, Etsy, PayPal, Venmo, and Apple Pay. You’ll need to include the 1099-K on your tax return.
• Shifting income and expenses. Consider accelerating income, or deferring earnings, based on profit projections.
• Fixed asset planning. Section 179, or bonus depreciation expense, versus traditional depreciation, is a great planning tool. If using Section 179, the qualified assets must be placed in service before year-end.
• Charitable opportunities. Consider any last-minute deductible philanthropic giving, including long-term capital gain stocks.
• Leveraging business meals. Business meals with clients or customers are 50% deductible. Retain the necessary receipts and documentation that note when the meal occurred, who attended, and the business purpose on each receipt.

 Document, record, review

• Create expense reports. Having expense reports with supporting invoices and business credit card statements with corresponding invoices will help substantiate your deductions in the event of an audit.
• Separation of expenses. Review business accounts to ensure personal expenses are not present. Reimburse the business for any expenses discovered during this review.
• Categorize income and expenses. Organize your records by significant income categories, expenses, and fixed asset purchases. If your accounting records are accurate, then any tax form should be easy to tie to your books.
• Inventory review. Review your inventory for proper counts and remove obsolete or worthless products. Keep track of the outdated and worthless amounts for a potential deduction.
• Review your receivables. Focus on collection activities and review your uncollectible accounts for possible write-offs.
• Cell phone record review. Review your telephone records for qualified business use. While expensing a single landline from a home office can be challenging, cell phone use can be documented and deducted for business purposes.
• Review your estimated tax payments. Recap your year-to-date estimated tax payments and compare them to your full-year earnings forecast. Then, make your 2024 4th quarter estimated tax payment by January 15, 2025.

As always, should you have any questions or concerns regarding your tax situation, please contact our RRBB advisors.