Fourth Quarter Tax Tips for Small Businesses

October through December is the fourth and final quarter of the tax year. Planning ahead can help your next fiscal year start off properly, so here are some tips and important dates to remember before wrapping up your small business’ books for the year.

File any unfiled taxes. October 17 is the deadline to file the previous year’s individual federal income tax returns through automatic extension.

Pay any anticipated taxes. October marks the final due date for quarterly taxes; if you know you will owe, estimating the total and paying ¼ of it every quarter can keep you from having penalties.

Delay additional income. If you think you will fall into a lower tax bracket in the coming year, delay any bonuses if possible until after January 1st. This can keep your taxes owed on additional income at a minimum.

Maximize tax benefits. If you can recognize a loss on stock transactions to offset gains, do it; also remember to check for capital loss carryovers from previous years that could affect this year’s final records.

Take advantage of pre-tax sheltering. Start a 529 plan for a child in your family, or set up an FSA for employees to contribute to.

Give money away. Charitable contributions to qualifying organizations are tax deductible. Top off your charitable giving before the end of the year. You can also gift up to $14,000 a year to anyone you want, without any tax consequences.

Are you eligible for Medicare? If so, annual open enrollment begins in October, and ends in early December. It’s time to figure out what this means for you, and make plans for your future health care options.

Pay outstanding medical bills. If you are under your cap, paying bills before year’s end can increase your total deduction in the following tax filing.    

Check your stock losses. November 30 is the last day to figure out if your stock trades are subject to “wash sale” rules – losses are disallowed if buying and selling of identical securities happens within a 30-day period.

Pay off any tax deductible amounts owed. Anything tax deductible paid by December 30th can be deducted from next year’s taxes.

Remember, if you have a tax question or need help, 2BenefitU’s Tax Helpline Benefit can give you peace of mind and steer you in the right direction.