2017-03-29 00:00:00TaxesEnglishReduce taxable income for retail businesses by making tax-deductible purchases in the fourth quarter of the calendar year.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Man-Making-Tax-Deductible-Purchase.jpghttps://quickbooks.intuit.com/ca/resources/taxes/make-deductible-purchases-at-end-of-year/Make Tax-Deductible Purchases at the End of the Year

Make Tax-Deductible Purchases at the End of the Year

1 min read

Careful tax planning should evolve as the fiscal year passes. Retail businesses typically anticipate a higher volume of sales in the fourth quarter. As such, product sellers should design a tax strategy that may differ from that of businesses that rely less on seasonal revenue spikes. Companies must make capital investments to improve operations. Organizations with unpredictable cash flow may need to finance those purchases. In this instance, you can build debt payments in to your monthly expenses and amortise the cost of equipment, using it to offset taxable business income. Retail organizations may want to pay cash for tax-deductible items at year-end, when the coffers fill up. Retail operations can look back on the final quarter of the previous year to determine how many dollars to allocate to business enhancements. Rather than doing nothing or carrying forward investment into the next year, shop owners might want to consider adding space or improving the quality of existing space. At this time, you might also sink more dollars into advertising and marketing efforts or consider creating a web presence to shift some sales efforts from the physical marketplace to a virtual store that can offer products to anyone at any time. You can claim these expenditures as deductions in the current year while aiming at increasing sales in the upcoming year. In a year where revenues are high, making contributions to a Registered Retirements Savings Plan reduces taxable income while setting aside tax-deferred dollars for retirement.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

How to File Self-Employed Taxes

When you’re self-employed, you have different tax responsibilities than a traditional employee.…

Read more

Everything You Need to Know About Business Sales Tax

Table of Contents (Click Me) What Are Sales Taxes? What Sales Taxes…

Read more

Tax Deductions for Freelancers: The Basics

Running a small business as a freelancer inevitably brings about its share…

Read more