Many small businesses use the cash basis of accounting, which means they record income when they receive it and generally deduct business expenses in the year they pay them. If your business follows this method, it might make sense to accelerate deductible expenses such as rent and insurance, paying them before year end. You might also be able to prepay certain expenses, though some must be prorated over time. Note that if you expect your tax rate to increase next year, delaying expenses could be the better course of action. Contact us for more information about when these strategies are allowed and whether they’d benefit your business.
Our Blog 