MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

The 8th Tax Day of Christmas: Prepaying Expenses

26 Dec 2019 · 1 min

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This content was created by MARK KOHLER. This content was uploaded by MARK KOHLER. This is a YouTube video titled "The 8th Tax Day of Christmas: Prepaying Expenses" (created 2019-12-26) containing a short tax-advice segment by MARK KOHLER. In it he explains year-end tax planning strategies—prepaying deductible expenses or deferring income—to reduce current-year taxable income, using examples (farmers buying feed, fertilizer, or equipment) and emphasizing the time value of money and practical timing tips.

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On the 8th tax day of Christmas, we want to talk about prepaying expenses or pushing income. Now this is an age old strategy a lot of small business owners have used. Talk to any farmer that goes out and buys some extra feed or fertilizer or a tractor they really don't need on December 31st so they can get a write off. That's the concept, but it's a valid one that we want to look at our books and say, what could I, you know, pay for now that I might use in January or February? And if someone owes me money, maybe I'll just tell them write me the check on January 1st. That strategy could end up creating a lot less taxable income for this year. And even though you will eventually get the write off or the income or whatever, it's the time value of money, you're really kicking the can down the road and getting the use of those dollars that would have gone out in tax for another year. So it's a value and it's not a big deal, but it's definitely going to put some extra dollars in your pocket. So read below, see if there's a strategy here that might help you out this year. End.