Defer Income & Accelerate Deductions

There are several steps you can take near the end of the year to put off income into the next tax year and increase your deductions in the current tax year.  In the last month of the year, you can delay billing out for services or merchandise so that payment will be received in the following year.  Make sure to factor in your tax bracket for this year and the bracket you expect to be in next year.  If you will be in a higher tax bracket next year, you may not want to use this strategy.  Similarly, one way to accelerate your deductions is to see what bills you have due in January and pay them before the end of December so that you can take that deduction during the current year.

 


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