It might seem early to be thinking about the end of the financial year, but by starting to plan your end of year strategy now, you can ensure that you are left in the best possible position for when tax season comes around.
One of the most common strategies for small businesses looking to decrease their taxes is to decrease the amount of revenue they report for the year. Since small businesses are usually taxed based on the profit that they earn during the year, decreasing the overall profit results in a small tax payment.
Most small businesses decrease their revenue by increasing the amount that they spend on qualified business expenses – anything you spend money on that will facilitate you earning additional business income.
Many people choose to decrease their revenue by spending money on business expenses such as office supplies, new equipment relevant to their field, or by paying bills for the next year in advance.
While all of these choices are great options for decreasing taxable income, another area of spending worth considering for your business is your technology setup. Technology is constantly changing, and investing some of your available profits into upgrading your computers, strengthening your security measures, or purchasing new and improved software may be one of the best steps that you can take for your business.
If you want to get the most value for your money, your best bet is to begin planning these investments with your IT professional in the near future. This will allow them to assess your current computer set-up and to work with you to develop an improvement plan that will best fit your needs and budget.
Improving your existing technology set-up can help to ensure that your business has an up-to-date security strategy and keep your information safe from recent threats. You may also find that new equipment helps you to complete your work more efficiently, or that re-thinking other aspects of your current IT setup helps your business to run more smoothly overall.
Your IT professional will be able to ensure that any investments you make in your technology are ones that are worthwhile and that are tailored exactly to your business’ needs. You will also want to ensure that you communicate with your accountant before making an investment like this – while the principle of spending more to decrease taxes seems simple enough, your accountant is your best resource when it comes to ensuring that your financial choices work out in your business’ best interest.
By partnering with both your accountant and your IT professional, you should be able to come up with a strategy that allows you to invest in your technology – an investment that will definitely pay for itself over time, while also helping to cut down on the taxes that you’ll need to pay this financial year.