Year end tax planning

OK, the new year is almost here and if you are like me the end of year tax planning is a key part of life.

This year has been very strange, even more than 2009.

Certain areas are up while others are down and others are gone.

I have made it through and next year is looking pretty awesome.

I made a prediction earlier in the year and it has come true.
My prediction was that after the November elections and the Republicans got some control back people would start spending money.

Boy let me tell you, a giant freight train of work came slamming down out of the sky and landed right on top of my predicting head shortly after. I have been running for over a month with no end in site.

How is this relative? Well let me tell you.

Being that this has been a strange year for business and my books were looking like a straight push or a loss, this sudden surge of work can change that.

RJR is an S Corp and operates on an accrual basis, therefore when the bottom line is huge that means a check to old Uncle Sam is written in March instead of Sam writing me one.

So one thing I have to do is defer billing on 2 months worth of work until January 2nd, this will help reduce the profit margin in the company. Another thing I will do is write a whole bunch of checks on December 31 and hope I can end the year with a zero bank balance.

Those are just a couple of tricks. On a good year I would do all of that, I would give awesome bonus's to my employees (I give high dollar to everyone, at least 5-10% of salary) and buy or upgrade equipment and then write myself a huge distribution check.

The important thing is to look not profitable.

Get this, they key to monetary business success is low income and high expenses. It took a while to get my mind wrapped around that since we are programed to believe the opposite.

The CPA is the one that does all of the magic. A good CPA makes all of the difference in the world. I personally have a CPA and tax attorney team assembled that work closely and I consult on a quarterly basis.

There is a lot more to this but I will stop now.