Home / Articles / Smart timing of business income and expenses can save tax – or at least defer it

Smart timing of business income and expenses can save tax – or at least defer it

November 25, 2013

Share:

By projecting your business’s income and expenses for 2013 and 2014, you can determine how to time them to save — or at least defer — tax. If you’ll be in the same or lower tax bracket in 2014, consider:

Deferring income to 2014. If your business uses the cash method of accounting, you can defer billing for your products or services. Or, if you use the accrual method, you can delay shipping products or delivering services.

Accelerating deductible expenses into 2013. If you’re a cash-basis taxpayer, you may make a state estimated tax payment before Dec. 31, so you can deduct it this year rather than next. Both cash- and accrual-basis taxpayers can charge expenses on a credit card and deduct them in the year charged, regardless of when the credit card bill is paid.

But if it looks like you’ll be in a higher tax bracket in 2014, accelerating income and deferring deductible expenses may save you more tax.

Accurately projecting income and expenses can be challenging. For help, please contact us. We can also provide additional ideas for timing business income and expenses to your  tax advantage.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

Related Articles

Article

2 Min Read

Supply chain software can help digitize the dilemma

Article

2 Min Read

Oversight and controls are key to limiting fraud in nonprofits

Article

2 Min Read

Standard business mileage rate will increase for the second half of 2022

Article

2 Min Read

Proposed regulations for inherited IRAs bring unwelcome surprises

Article

2 Min Read

Get your piece of the depreciation pie now with a cost segregation study

Article

2 Min Read

Navigating the New Data Privacy Landscape

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.
  • Hidden
  • This field is for validation purposes and should be left unchanged.