Vita's Tip In 10: Use This End-Of-Year Strategy To Reduce Your Taxes

Hello, hello, friend! Welcome back to another episode of Vita's Tip in 10. Today is a bit of a follow up to last week’s episode, where I talked about end of the year activities to finish strong and feel accomplished.

One of the end of year activities I recommended was incurring as many expenses this year as possible. Today we are going to unpack that in more detail.

This may or may not be particularly relevant to your situation right now, as I know the economy has changed and some areas and businesses have felt these impacts more than others. I have colleagues that have reported huge revenue growth this year, while others have experienced a plateau or even a decrease from last year.

So, if you've had a fantastic year and find yourself facing the good problem of a higher net income, I have some valuable insights to share with you. Now, we all know, as my friend Julie Murphy says, a good problem is still a problem to solve. So, let's dive into some end-of-the-year expenses that can be your solution.

Before we get into the nitty-gritty, let me clarify. We're not talking about frivolous spending. We're talking about recognizing those expenses you'd be incurring next year anyway and front-loading them into December to bring down your net operating income and, consequently, your tax liability.

First on the list—workroom supplies. If you run a workroom, you know the drill. Pillow forms, linings, welt cord, ribs for Roman shades, buckram, gimp, snap tape, thread, dacron, fo, drapery pins, plastic tubing, hangers, zippers, and more. Take a look at your SOP, identify your suppliers, and get ahead by purchasing what you'd need for the next three to four months.

Maybe you specialize in Roman shades—think ribs, bottom weights, safe-T rings, regular rings, ladder, cordless supplies. Whatever your focus, go through your list, see what you have, and stock up on those essentials. Think about your equipment too—does your sewing machine need an upgrade? Is your trusty iron showing signs of wear? Don't forget those machines that could use a good servicing.

Moving beyond the workroom, consider your office essentials. Printer paper may not be the most exciting purchase, yet it's a practical one. Buy that big box in December, and it could last you six to seven months. Speaking of printers – printer cartridges can be quite pricey. Supplies: pens, pencils, highlighters, post-it notes, your own branded notes, business cards, scotch tape, shipping tape, staples, note pads, checks, stamps. For the office, think of bigger things too. Have you been thinking of upgrading your desk? Is your desk chair been showing wear and tear? How about a bigger screen? A better keyboard and mouse?

Looking ahead, consider your conference plans. If you're attending the International Window Coverings Expo (IWCE) in April, book your flight now and recognize that expense in December. Refreshing your samples is another smart move. Whether it's trim, fabric, or hard goods samples, plan a refresher. It's an investment that could pay off in the year to come.

Now, think about your building security system. It might not be the first thing on your mind, yet it's an investment in the safety of your space. And what about that new TV you've been eyeing for your conference room or workroom?

If you're planning to hire in the coming year, think ahead. New team members will need computers, iPads, phones, and the standard package of a monitor, keyboard, and mouse. Get it all now, and don't wait until you've already expanded your team.

Now, you might be wondering, "How do I create a comprehensive list of these expenses?" Well, it starts with a deep dive into your QuickBooks. Go through it line by line, expand it to its detailed form, and look at every single line item. Ask yourself, "Will I incur this expense next year, especially in the first quarter?" If the answer is yes, consider front-loading it into this year to decrease your tax liability.

What I gave you is just a starting point, not an exhaustive list. Tailor it to your business needs, and use it as a guide to smart spending that aligns with your plans for the future.

As we approach the end of the year, let's be strategic about our spending. Turn those necessary expenses into strategic moves that benefit your business's bottom line. If you've had a great year, let's make sure you end it on a high note by building a financial strategy that sets you up for an even better year ahead.

That's a wrap for today's episode of Vita's Tip in 10! If you're eager to invest in your professional development to reduce your tax liability, and want more insights on financial management, mindset shifts, CEO strategies, or digital project management tools, I’ve got you!

You can join my Systems Driven Operations class at LuAnn University – registration is open and early bird pricing ends December 19th! Alternatively, opt for my VIP Experience, a private, two-day in-person intensive where I literally hand over everything I’ve got. There are limited spots left for 2024, and pricing will be increasing next year.

Reach out to me, and let's schedule a conversation. Meanwhile, I'll be working on my next episode of Vita's Tip in 10. Talk to you next Thursday!