Accountants tend to have a lot of work to accomplish as the year winds to a close. Tax accounting for the next year takes up the bulk of many accounting professionals' time, forcing them to delegate other tasks during the focus on tax preparation. Those working to help ensure a smooth transition from year to year can help reduce overall tax burdens for their employers and clients. Tax accounting moves can help ease the stress of busy year-end tasks and save money for companies and private clients.
The first move that can have positive benefits for those working in tax accounting is the shifting of income and expenses. Depending on your accounting setup, you may be able to shift much of your company's income during the final month or months of the year into the next one using your existing collections and accounts receivable processes. This can postpone collections on those and allow you to tackle the first eleven months' worth of income with an entire month to spare. To maximize savings, consider shifting expenses from next year by making purchases before the end-of-tax-year period.
The second big move that may offer tax accounting professionals some relief during the busier end-of-tax-year season is the collection of all supporting documentation for expiring provisions. Many tax code provisions expire each year, and the requirements vary greatly from year to year. As the tax year winds down, the IRS publishes important guidelines for both current and expiring provisions. Making the most of provisions that are winding down can help you reap benefits that may be unavailable in current years. Many of these literally require an act of Congress for extension or renewal.
The third and final move is likely to require direct input from your employers or clients. Capital gains taxes continually make the news as laws regarding them change. One of the best moves your clients can make, with your professional assistance, is to sell investments that have lost money in order to offset the capital gains from investments with good returns. This can help reduce the tax burden of your clients. By quickly working to identify and deal with both gains and losses alongside your employer or clients, you can reduce your own workload when crunch time hits and the big decisions must be made.
These three tax accounting moves can make a real difference on both the bottom line and how much time you have to spend working on year-end tasks. Getting a jump on the hectic season by shifting expenses or income, collecting supporting documentation, and selling off investments with losses can help ensure a smooth transition into the next year for both your employers or clients and your tax accounting team.
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