Well the year is almost over, and there are some GREAT things you can go to reduce your Federal Income tax for 2006. Here is a short list of "easy" things to do in the next ***3*** days
1: Prepay your State of California Income Tax prior to 12/31, and you will get a eduction on your Federal return
2: Clear out all those clothes, books, old computers, bicycles, etc and get them to Goodwill, Salvation Army, or any other charitable organization.
3: Additionally, if you are about to buy a hybrid car, do it before year end and you can get a tax benefit of up to $2,600
4: If you have a Pension Plan, Keogh, SEP be sure to make your contribution before 12/31 (IRA's can be put in 2007 as long as you do it before you file your tax return for 2007)
5: Purchase items your business will require in the immediate future to maximize deductions for this year. If you can see a need for goods and services in the first quarter of the new year, buy them now, if cash flow permits. Consider the following items for expenses:
Office Supplies: Stock up on fax paper, printer cartridges, stationary, and other office items.
Pay Bills Early: Pay your bills before the new year in areas such as; cell services, subscriptions, rent, insurance, and utilities.
Equipment Purchases: If you will be buying new office equipment, consider purchasing now. You'll have to decide whether an immediate write off is best or spread out the depreciation over years. Consult with an accountant to examine your circumstance and company structure to maximize your deductions. In addition, your equipment will have to be in your office, "in use" by year-end.
6: Unless you have reason to believe that next year will bring you a higher income and move you into a higher personal income tax bracket, you may want to defer income until after the first of the year. If you are self-employed, for example, send the last invoices out late in December so you will more likely receive payment in January
7: Pay your January 1st mortgage payment on or before December 31st: This allows you to take an additional deduction for interest paid. Remember to add the interest amount to the amount reported by your lender when they send you a 1098 form
How do you find the best "creative" accountant. That is, an accountant who knows the ins and outs of tax write offs for creatives? Been looking, but can't seem to find a resource...thanks to anyone who responds!
Renee, I found mine through referrals. Try asking some friends of yours that have studios.