Getting Your Finances Right Before the End of the Year

Don’t look now, but we’re already nearing the end of 2022. Another whirlwind year for many of us – reinforcing the importance of staying focused and taking care of what we can control. That’s precisely why we want to address a few year-end financial tasks you can knock out to set yourself up well for 2023.

It’s important to make time for friends and families during the upcoming holiday season, so use this post as a checklist of sorts to complete before we get caught up in the celebrations.

Gather documents and paperwork

Disorganization is one of the key killers of successful businesses. We can do all the great work in the world and keep track of our spending, but if we have no documentation of all this then we’re left with half the result we desire.

Back in March, we wrote about getting ahead for the next tax season. In that post, we talked about documenting all your expenses, and now is the time to make sure you’ve got all those documents organized and in the right place. This knocks one important item off the checklist for what’s sure to be a busy start to 2023.

Check off important business purchases

The end of the year means you’re running low on chances to get any final business expenses on your 2022 tax return. If you’re right on the edge of a deduction or tax bracket then this can help put you over the edge, taking full advantage of your tax dollars.

You can essentially look at these purchases with a discount – the tax money you save on next year’s return comes off the total price of what you’re spending today. This doesn’t mean you need to go out and buy unnecessary items, but if you know you’re going to need a new computer or another piece of equipment early next year then you might as well get that out of the way now. The same applies to any additional services you plan to pay for in the new year.

Take full advantage of all deductions

Some businesses don’t get the most out of their money because they bypass tax deductions that could be saving you money. We want to take a look at a few that you may not be aware of.

Unpaid debts – If you’ve got unpaid balances from customers that haven’t been taken care of you may be able to write these off on your tax returns. This generally applies to older customer debt that doesn’t appear likely to be paid.

Home office supplies – The modern worker is often working from their home. If you have a space in your home that is exclusively used for work (it can’t be dual-purpose) and you have purchased items to set that office up then these can be written off, as well.

Research and experimental costs – Is your business aiming to change the world by taking on extensive research or experiments? If you’ve been covering the cost of such research then you can write this off in the new year. Be sure to document those costs to provide to the IRS.

Get ahead of 2023 changes

Right now, we’re going through some serious financial changes as a country. Inflation and other problems could lead to a recession in 2023. This is likely to present even more changes than we’re already dealing with. It’s important for a business owner to stay ahead of these changes.

The Inflation Reduction Act made some changes to how high-earning C corporations are taxed. Companies that use and contribute to renewable energy will soon earn higher tax credits. Additional funding for the IRS to add new agents may also lead to more audits for businesses across the country. Because of this, it’s even more important to get your documents in order and make sure your returns are accurate.Attorney Robert V. Boeshaar knows business and tax law and can help you resolve your disputes with the IRS. Whether you’re an individual or a small business, we can make sure you’re not being unfairly targeted. Contact our team today.

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