Time to Spend Some Money!
As the year comes to an end, it’s time to start thinking about how to spend the extra money in your business account to avoid having to pay taxes on it. Small business owners have to pay taxes on the profit made by a company at the end of the year. One of the best ways to avoid paying these taxes is to reinvest the extra money into your business. There are many ways to spend this extra money, below are a few tips on how to use these dollars effectively.
Payoff Bills
The most cost effective way to ensure that your business won’t have to pay capital gains taxes is to use all the money in the business’s account to pay off all outstanding debt. Spend the time at the end of the year to pay off every bill you can. To go even further, once all the bills are paid you can start looking and placing orders for next year. In some cases, you can even attempt to prepay some bills so you can start the following tax year off in a good position. Paying these bills before December 31st can help ensure a lower tax payment and helps strengthen the fiscal position of your company.
Holiday Bonuses
The end of the year coincides with the holiday season making it a great time to pay some bonuses to deserving employees. If your company has extra cash in its account toward the end of December why not help out your hardworking staff by rewarding them with a bonus payout. If the money is still in the account at year’s end, you’ll have to pay taxes on it and lose the money anyways. By paying out bonuses you increase morale at the office and the money can go to people who have worked hard to make it and not the government.
Upgrades to Technology
Whether you need a new company truck, an upgrade to your computer hardware, or a software update, the end of the year is an opportune time to make this investment. Many people don’t give a lot of thought to depreciation of business equipment. Computers get out dated faster and faster every year. If you have the extra money, invest in staying modern and up to date with computer technology. You will eventually need to upgrade anyways so why not spend the extra money doing it now. In addition, companies with vehicles know that maintenance can be costly. Get existing vehicles serviced and replace a vehicle if need be.
Upgrading Your Workplace
Are you and your employees comfortable at work? Do you have all the furniture you need to maximize productivity? The answer is no from a large amount of companies and the end of the year is the perfect time to help change that. In December, you have a better idea of how much money you will have to spend to avoid paying taxes on it. This allows you to invest in upgrading desks and chairs for you and anyone else if you can afford it. If your desks and chairs are up to par with what you need, you could invest in that conference room you have always wanted or to upgrade your offices first impression by redoing your reception area. Office furniture is always needed, and December is a wonderful time to buy.
Make a Marketing Impact
Another way to spend extra cash on hand is to reinvest that cash to make money next year. Hire a marketing firm to help with a campaign to increase your business in the following year can help set you up for success. You put yourself in place to have a strong first quarter the following year while protecting the cash you have made for the end of the current year. One thing is for certain, the government is not going to help you make money in the future and a marketing campaign can. Investing in yourself and your company is always a better option.
You work hard for your company to succeed. So remember to invest in your company in December to help position yourself for the future. Don’t let the government take money from your company that can be put to better use. Make the most of December and set yourself up for future gains!
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