New Year is not only about popping the champagne cork with your family and friends. You must also invest some time for the year-end tax planning. In fact, you can conveniently handle this situation with some prior planning and smart moves. This is specially applicable for the small business owners. There are many tax consultants who can help you to save on your tax. You can also follow certain tax saving strategies. For example if you have just bought some heavy engineering machinery or some software for your business , you are entitled to get 50% first-year bonus depreciation. However, this is applicable only for new and unused equipments. Such depreciations can also be claimed for new real estate land renovations. But before making this sort of claims it is better to consult a tax professional as a number of real estate costs will not qualify for this bonus.
Deferring your income for a few days is also good way to save your tax. If you have a payment due in the last week of December, try to receive it in the first week of January. This payment will not be taxable until next year. This deferral strategy often depends on the legal structure of your business as well as on your overall turnover. Also make sure that you have enough cash flow to sustain any kind of deferred income. Simultaneously, pay your other bills early. For example, the tax that you pay for your property is deductible. Likewise, you can also get rebate on your insurance premiums and medical expenses.
