As we head into 2016, small businesses should be looking back at their finances and making any final moves that may save them money when taxes come due. In particular, it’s an important time to see where your business might be able to amass a few more tax deductions before the year is over.

Wondering how to make the most out of your current business situation? Here are 6 steps you can take before year’s end to improve your final tax payout.

Spend Smart

The Clock Strikes Midnight: End Of Year Small Business Tax Tips The end of the year is the perfect time to make tax-deductible purchases. Does your office need new furniture or a few more printers? Buying new office equipment, a deductible expense, will decrease your income in this last month of the year, reducing the amount you’ll pay in taxes. Whatever purchases you make, need to be made by midnight on December 31st.

Other ways to decrease your business income in December include making charitable donations and paying certain business-related bills in advance. If you can pay your January rent, phone bills, or other monthly bills during December, these will also decrease your income. You’re going to pay them anyway, so you might as well benefit from the timing.

Put The Kids To Work

The Clock Strikes Midnight: End Of Year Small Business Tax Tips Are your kids on the payroll at your business? If not, put them there before the year is over; they likely provide some services for your business anyway, so paying them is both fair to them and beneficial to you, even if all they do is sweep up or shred papers while waiting for a ride home. This procedure can be slightly tricky, however, but here are the basics. The first question you need to ask is whether your children are 18.

If your child is under 18 and your business is a single-proprietorship, you don’t need to withhold payroll taxes. However, if your child is over 18, you must withhold taxes – but as long as their income is relatively minimal, your child will be able to use their own standard deduction to offset this amount.

If you can put your kids on the payroll, should you also put your spouse there? This is actually a less helpful strategy in most cases. Only add your spouse to your payroll if it benefits your overall retirement savings plan. If adding your spouse to the payroll just means making them pay more taxes, then putting them on the docket is irresponsible. Kids are a much safer option.

Consider Your IRA

The Clock Strikes Midnight: End Of Year Small Business Tax Tips Have you contributed to your IRA this year? IRA funds are a great safety net for your retirement years and one of the major advantages of having such an account comes from the ability to make nondeductible IRA contributions. These contributions cut into your income for the year, but you don’t have to pay taxes on them yet. This allows you to wait until you’re in a better financial position to pay the taxes on such funds. Just make sure to retain all associated paperwork – IRA documentation should be kept in perpetuity.

Consider Travel

Is your small business run out of your home, but requires trips to client homes or offices? Working from home is actually a great way to increase how much of a travel related deduction you can make each year. For example, a typical commute – first and last trip of the day – is not tax deductible, but if you work from home, then your commute simply means that you walk down the hall. Thus, any trips you make away from the home for work count as tax deductible because they are not part of standard commute calculations.

You should also consider purchasing a vehicle for your business before the year ends, as vehicle deductions are often expanded by Congress at the last minute. Assess your business needs to determine how large of a vehicle makes sense for you and whether or not the outgoing expense to purchase one would balance out when tax deductions are added.

Give Gifts

Did you know that you get an annual gift exclusion on your taxes? This exclusion means that you can actually give away a large sum of money to multiple people without anyone incurring tax responsibilities.

Gift exclusions are far from negligible. As an individual, you can give others up to $14,000 dollars, $28,000 if you’re married and combine your gift exclusion. If these gifts are given to your child and their spouse, you can in fact give each couple $56,000 a year without worrying about gift or estate taxes. Don’t squander these gifts! If you have an income overrun that’s harming your business’s tax position, giving away gifts under this exclusion can be a great solution as there is no restriction on the number of recipients.

Consider What Can Wait

In the same way that you’re trying to get ahead on some of next year’s expenses by paying them now, consider what income can wait until next year. Is there a payment you’re expecting by December 31st that could be extended to be paid in the New Year? Consider this an opportunity to extend kindness to your patrons – they’re cash strapped from holiday shopping and now they don’t need to worry about paying your bill until the New Year. The advantage to you? Not paying taxes on that earned income this year. A big part of managing your taxes appropriately derives from being able to push income and expenses around to your advantage.

Tax Guidance You Can Trust

Are you a small business owner trying to get your finances in order for the coming year? Contact Shockley Bookkeeping and Tax Services today to consult with one of our experts. We bring years of experience handling small business finances to bear when considering the best strategy for your company. We can guide you through tax exemptions, deductions, and self-employment taxes, among other complex tax concerns. When it comes to your finances, turn to the team you can trust – Shockley Bookkeeping and Tax Services.