Getting that end of year tax bill can be a big kick in the gut. No matter your politics, seeing that number in black and white and then comparing it to your bank account can throw you for a loop, especially if you’re not prepared. Last week my advice was to get an accountant. It’s the same this week. I am by no means an expert or financial advisor of any kind. This is just some of what I’ve done to lessen my own big number. I also don’t recommend doing most of these things without the supervision of an accountant because everyone’s situation is different. What worked for me may not for you.
Now that that’s out of the way, the first and easiest thing is to plan for purchases near the end of the year. If you know you want to get a piece of equipment like say, a new computer, do that before January 1. The purchase amount will be removed from your income and therefore not taxed. Don’t go crazy spending money you don’t have, it’s not a 1 to 1 equation but if you' were on the fence or planning to do it anyway, get it done so you can avoid the taxes on it.
You can also do good with that money! For example, providing certain healthcare options for your employees pulls that money off the income as well and gives you the opportunity to provide something for your staff that you may not have before. There are tons of these options and I know very few of them but it’s a really good way to get a reward for doing the right thing.
There’s of course the old standby of putting money into a 401K. This is always a good option to help you prepare for the future.
Finally, preparation is key. it may not lessen the burden overall but it will keep your eyes from popping out of your head when you see the total. Start saving money for taxes early and often. There are a variety of ways of doing this, a simple savings account all they way up to paying yourself a salary.
This is just a short post of what can help, for a full list and the best solution for you (did you see it coming) ask your accountant.