As we close out this year and prepare for the next, it’s important to take a moment to reflect on the past twelve months and see where we stand financially. Making small changes in your financial statements can benefit you and your business in the long run.
Here are a few reasons our tax accountants believe that year-end adjustment is important.
1. Deferring Income
One of the most important year-end adjustments is deferring income. By deferring income, you can postpone paying taxes on that income until the following year. This can be a particularly beneficial strategy if you expect to be in a lower tax bracket in the future.
2. Accelerating Deductions
Another important year-end adjustment is accelerating deductions. This means taking advantage of deductions that you may not have been able to take earlier in the year. For example, if you make a charitable donation in December, you can deduct it from your yearly taxes.
3. Reviewing Withholding
It is also important to review your withholding at the end of the year. Withholding is the amount of money withheld from your paycheck for taxes. If too much money is withheld, you will get a refund when you file your taxes. However, if not enough money is withheld, you will owe taxes. Therefore, it is important to adjust your withholding so you do not end up owing or getting a large refund.
4. Changing The Transaction Classifications
A tax accountant would advise removing a part of the total amount due from long-term debt and classifying it under short-term debt. This helps bring the deadline closer and proceed with the payments on time.
5. Maximizing Retirement Contributions
If you are eligible to contribute to a retirement account, it is important to maximize your contributions at the end of the year. This is because retirement contributions are tax-deductible, which can help to lower your taxable income. Additionally, the sooner you start saving for retirement, the more time your money will have to grow.
6. Planning For Estimated Taxes
If you are self-employed or have other income that is not subject to withholding, it is important to plan for estimated taxes at the end of the year. Estimated taxes are quarterly payments made to the CRA to pay taxes on this income. If you do not make estimated tax payments, you may owe penalties and interest when you file your taxes.
Hire Top-Notch Tax Services In Richmond Hill
Whether you’re looking for a corporate or a personal tax accountant, we cater to all your needs at Accounting Plus. We offer exceptional personal tax, corporate tax, and accounting and bookkeeping services to all our clients in Toronto, Richmond Hill, Markham, and nearby areas. Our team of accountant uses top-notch software Xero for cloudbased accountingsolutions in Canada.
We can also help you complete your loan application and developing a business plan from scratch with our business advisory services.
So hurry up and contact our team for tax services before this year ends.