End Of Year Financial Strategies

On December 31st, 2015, posted in: Accounting, Marketing by 0 Comment

Before you know it, you will be flipping the calendar to 2016. Before that happens, though you still have one week to work toward reducing your tax liability and improving your company’s overall financial standing.

At our virtual accounting office, we suggest the following, and can help you with these end of year financial strategies:

  • If you have a health savings account, you will want to make certain you have “spent down” the contribution you’ve made. An HSA reduces your taxable income for 2015. Don’t confuse an HSA with a FSA (flexible spending account). A FSA allows you to put money into an account that you withdraw to pay for medical expenses such as prescriptions, co-pays and others. An FSA has a specific timeframe in which it must be spent down – ask your employer or benefits provider what that deadline date is.year end
  • Have you maximized your contributions to your retirement accounts? With a 401K plan or a traditional IRA you can invest and add money to the account before year’s end if you haven’t met the maximum contribution. With a traditional IRA you can contribute $5,500 annually if you are 50-years-old or older.
  • If you either offer health insurance coverage to your employees or have your own health insurance policy, the time is now to review your coverage and make changes during open enrollment if needed.
  • If you have been meaning to donate to a charity, the time is now. You can make donations to a charity of up to 50% of your adjusted gross income to a qualified charity/charities. You can make donations in the form of clothing, cash, household goods or even vehicles.
  • Do you have excessive cash on hand? Consider doing profit sharing for your employees. This will reduce your taxes, increase your own savings, and build employee loyalty.

As with any accounting and bookkeeping advice we offer, you need to check with your accounting professional to make certain you understand the nuances of your unique tax situation before you make any changes.

 

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