The end of the tax year is just around the corner and it’s time to prepare the annual report. We’ve put together some tips that would make you and your accountant happy and also do good for your employees
Many business owners tend to shop big offers during the end of the year, in order to reduce tax expenses. However, a second before pulling out your credit card, you should consult with a CPA and ensure that planned expenditures are tax deductible – and how. Also, keep in mind that there are expenses recognized for tax purposes over a period, according to predefined depreciation law (usually Purchases of fixed assets), and the offset is made in several years. Such expenses include the purchase of vehicles and purchase of computer equipment.
Investment in the employees and their education is always a wise move. Vocational training of worker has signaled the contribution to workplace and made them to know the business and to develop them abilities. Employee has studied and was able to invest his knowledge in the workplace and to increase productivity – at the same time strengthened its commitment towards the organization that has investing in him.
In addition to the benefits listed above, employers should keep in mind that professional workshops are recognized as expenses for tax purposes and may include them in the annual report to the IRS at expenditure.
Mandatory pension contributions / Employee Training Fund
No deposit in the compensation provisions during the year? It is very possible that you should hurry up and complete the process. Accountant, Ron K., explaining that if there are gaps in contributions made during the year, you can complete the compensation liability just before the end of the year. This expense will be recognized in the tax year in which the compensation was deposited in practice. It also recommended to make contributions for employees training funds: Beyond the fact that the channel produces his own education fund is also a deductible expense for the employer and also tax exempt. In fact this is, again, an commitment to his job for him. Fixed deposits are long-term horizons jobs and contribute to economic security of companies with ongoing career planning.
Payment of tax liabilities
To avoid flying payments that may affect cash flow unplanned from at the beginning of the next tax year, you should plan the treatment of tax obligations to the authorities. Preliminary calculation and testing of expected tax liability against actual payments made during the year is important for improving and streamlining down payments. Actions such as bringing forward expenditure, advance payments or payments of social benefits can help reduce the indebtedness from the end of the tax year, and will assure you that the opening of year is organized.
Donations, investment projects and film productions
The State of Israel is trying to encourage investment in channels that promote the interests determined by stranding , such as investments in oil, local projects or movie production companies. It is important to recognize the tax benefits for investment in any of these channels, and undoubtedly should consider them positively. Tax authorities encourage philanthropy through tax credit in respect of contributions: There is a large option to allow employees to make personal contributions and receive tax credit directly through their wages. “This allows employees to receive a tax credit for contributions directly without filing such a request to the tax authorities. This creates a situation where the company encourages contributions and income tax, or rather the state actually participates in the contribution that it returns money in form of a credit to the employee.” says Ron K.