Year-end tax tips for every business owner

Fall is in the air, and the new year will be here before you know it. That means it's time for business owners to start checking items off their year-end to-do lists.

A savvy business owner can reduce the company tax burden by carefully timing purchases and business transactions. Is making a year-end to-do list on your current to-do list? If not, here are some items to get you started.

Buy needed equipment

As a business owner, you can write off business purchases on your taxes. If you buy needed equipment and put it in use this year, you can write it off at tax time in April. Of course, your tax situation varies depending on your individual circumstances, so it makes sense to consult with a qualified advisor on questions about tax write-offs, including whether or not you should write off the entire amount of an equipment purchase or spread it out over multiple tax years.

Pay bills early

As with equipment purchases, business-related bills such as rent, telecommunications services, and utilities can be written off for the tax year in which they were paid. This applies even if you pay in advance for services you'll use next year.

Defer payments

When you bill clients for services rendered toward the end of the year, consider delaying the billing for a short time to increase the chance you'll receive payment after January 1. That means you won't have to report the payment as income until next year.

Contribute to your retirement plan

The money you defer as retirement savings into a qualified plan is generally not taxable until you begin withdrawing your tax-deferred savings. If you have a retirement plan, consider putting some extra money into it before the end of the year. If you don't have a retirement plan, this is the perfect time to start saving.

Write off bad debts

Almost every business owner encounters a deadbeat client at one time or another. Do you have an uncollectable debt on your books? If so, now may be the time to write it off. You'll receive a tax deduction. But make sure you have records of your efforts to collect payments.

As you can see, some of these year-end tax tips are easy to implement, while others take a bit more planning and foresight. But when tax time rolls around in April, you'll be glad you took time now to reduce the amount of taxes you'll owe.

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