Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Dec 2

    At this time of year, some small business owners begin to worry about whether they’ve taken care of their taxes for the year. Sometimes this is a result of an unexpected windfall late in the year, the company’s cash flow not being plentiful when the quarterly taxes were due, or just poor planning.

    But there’s a little bit of time left to do something about it. Well, barely.

    Here are the top 5 last minute deductions you may have overlooked that can cut your company’s tax bill.

    1. Claim every “ordinary and necessary” business expense. The Internal Revenue Code doesn’t list every type of expense that may be deductible for you. An “ordinary” expense is one that is common in your industry and for your size company. It may be “ordinary and necessary” for Trump Enterprises to spend money on a helicopter for The Donald, but not likely for you and me.
    2. Write off all your bad debts. Be realistic – do you really expect to collect money from that delinquent customer? If, for some reason, you do collect it in the future, then you can claim it as income at that later date.
    3. Record out-of-pocket expenses. If you’ve paid company expenses with cash out of your pocket, or your personal credit card, then make sure those expenses get recorded for the business. You can either reimburse yourself for those expenses or treat the money spent as a loan to the company.
    4. Claim credit card and other interest. All that troublesome interest is tax deductible as a business expense.
    5. Claim your tax credits. Your small business may be eligible for a health care tax credit, bonus depreciation and more retirement plan contributions.

    Of course, tax planning shouldn’t come down to last minute stuff in December. We can be of a lot more help throughout the year.