Timely Accounting Tips For 2025
Hi, I’m Cheryl Taylor, a QuickBooks ProAdvisor serving businesses in the greater Placer County, California Bay Area, and the entire United States. I have a Magna cum laude honors degree in Bachelor of Science in Accounting. I love giving business owners wings to fly!
5 tips to close out the year. They may not all apply to your business.
Pay yourself first! Many of my contractor clients think of making big purchases of equipment or vehicles at the end of the year. This may mean taking on big debt as well. I’m a huge proponent of living debt free. If you just want to shelter income, I always recommend putting money in a Traditional IRA and/or a Solo 401K if you are a sole proprietor. As a sole proprietor you have until April 15 to contribute for the prior year. Initial set up of a Solo 401K must be completed before December 31 of the first year, then contributions going forward can be done up until the April 15 deadline.
If you deduct business mileage, be sure to note your odometer reading on January 1 or better yet, get an oil change where the reading will be recorded. It will help prove your mileage in the event of an IRS audit. The IRS requires a log of all mileage showing date, purpose or person you are meeting with and the exact mileage from your place of business to the meeting place and back. I use a spreadsheet for this purpose and log the mileage from the Google map. There are also apps for this, but you must remember to turn them on in your phone. In 2025 you will be able to deduct .70 per mile. Trust me…this can add up to thousands of dollars in deductions if you maintain a log.
If you accept PayPal, Venmo, or any merchant account where you have money accumulated outside your regular business bank account, you will want to transfer the money to your business bank account. Zero out these accounts so that you know precisely all the income you have received in the current year and these accounts should be reconciled against the bank statements, which are considered the source of truth.
If you have taken out an SBA Loan, log in to your account and print out the amount of interest you paid during the current year. You will need this information to deduct the interest expense for your tax preparer.
California employers you will need to log in to your payroll provider and update your SUI and ETT on January 1. EDD will send a letter letting you know about this new rate. Be sure to update the new rate before you run your first payroll in 2025.
