Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: Master Income and Expense Shifting for #taxsavings

Name: Painting Business Owners: Master Income and Expense Shifting for #taxsavings
Uploaded: 2024-12-27T14:15:04+00:00
Duration: 40 s
Channel: Daniel Honan
Description: In this instructional segment, the speaker explains two core tax‑timing strategies for painting business owners. First, expense acceleration: by…

27 Dec 2024 · 1 min

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In this instructional segment, the speaker explains two core tax‑timing strategies for painting business owners. First, expense acceleration: by purchasing materials and supplies needed for upcoming jobs in December and charging them to a credit card, the business can claim the expense as a 2024 deduction even though the cash payment occurs later. Second, income deferral: by postponing the collection of payments for work performed near year‑end until the following year, the business can recognize that revenue in 2025, thereby delaying the associated tax liability by up to twelve months. Both tactics allow owners to manage cash flow and reduce current‑year tax burdens.

Chapters

shift income and expenses. So if you've got jobs coming up in January, February, March, can you buy the materials and the supplies for those jobs in December and get the tax write-off in 2024? You don't have to pay cash for them. You can put them on credit and pay the credit card off in 2025. As long as they were purchased in '24, the tax write-off is for 2024. Same thing with income. Maybe you wait until 2025 to collect on some jobs, that you did, you know, around the holidays, then you can recognize that income in 2025, push it off, kick the can down the road 12 months, and not have to pay the taxes right away.