|December 14, 2014
|The Interface Financial Group
|PULSE Interactive Newsletter Dec. 2014
|Invoice Discounting, Tax Tips, The Interface Financial Group
There is no time more stressful for small to medium size business owners than the end of the year. This period of juggling numbers, sorting out income, and finding the most efficient tax breaks can confuse anyone. To avoid the cash crunch, many of today’s businesses are turning to invoice discounting services like The Interface Financial Group (IFG) for some much needed help.
There is never a greater need for finding fast solutions to cash flow problems than at the end of the year. The Interface Financial Group provides financial services including invoice discounting to entrepreneurs and growing small businesses.
I would like to offer you these five tax-saving tips to help small and medium sized enterprise (SME) owners and entrepreneurs deal with the year-end cash crunch:
1. Purchase necessary equipment and technology. If you have any plans for purchasing equipment or computers in the next year, making those purchases this calendar year will allow your business to write off the taxes against this year’s income. The majority of small businesses can deduct equipment purchases with the option of an immediate write-off or one spread out over years.
2. Start up, or contribute to, your retirement plan. Payments made to your business’s existing retirement plan before the end of the year can reduce your income for the year. I always say, if you do not have a retirement plan set up for you or your employees, consider starting one. In 2012, the federal, provincial, and territorial Finance Ministers approved a new type of broad-based privately administered pension arrangement called Pooled Registered Pension Plans (PRPPâ€™s) to help bridge existing gaps in the retirement system. They will allow individuals who currently may not participate in an employer-sponsored pension plan, such as the self-employed and employees of companies that do not offer a pension plan, to make use of this new option.
3. Delay or defer income. Any income a company receives during early January instead of late December can cut your tax bill. Income received in early January will not be taxed until the following April. If lower income tax rates are predicted for the New Year, I think delayed income makes a lot of financial sense for many business owners.
4. Increase Expenses. Similar to delaying income, increasing expenses at the end of the year can reduce income and maximize your tax deductions for the year. If there is an upcoming need for goods or services, anything from phone plans to office supplies, purchase them now.
5.Â Use an invoice discounting service. Many small business owners regularly use an invoice discounting service like IFG to maximize their year-end cash position. A strong cash position is a universal must for all businesses.