What Your Business Should and Shouldn't Be Buying in December
There are some great ways businesses can spend money in December (particularly for tax purposes). Likewise, there are also things businesses should never buy in December. If you're unaware of what those things are in either category, we have a few of those things listed below.
DON'T Buy Mutual Funds or Exchange-Traded Funds (ETFs)
We're not going to get into heavy detail with this because we're marketing and IT experts, not financial experts. But what we do know from business experience is that there are taxable year-end capital gains associated with these funds. Buying them this late in the year means you can't benefit from any these gains because they never had a chance to accrue. In other words, you would be causing yourself unnecessary tax misery because your timing is off. Do your research and speak with a financial expert for more information on mutual funds and exchange-traded funds.
DON'T Buy New Technology Products
If you're thinking about buying some new technology for your business in December, hold off. Once you've missed the Black Friday deals, you're unlikely to find deals like that again until January. This is because many electronics are marked down to make room for newer electronics. This isn't to say you won't find any deals in December. But, if you're really wanting the best possible savings, wait until January. That is unless you would get a bigger tax refund for buying it in December than the deal you would get on it in January. Which brings us to our first "Do"…
DO Purchase (Necessary and/or Budgeted For) Big-Ticket Items
If there are any last-minute purchases on big-ticket items that your business needs or wants (and it fits within the budget), do it before the end of the year for tax deduction purposes.
DO Consider Charitable Donations
Charitable donations are tax deductible. Many businesses are aware of this and take advantage of this. If your business hasn't, consider doing so before year's end.
Knowing which purchases and spending habits will and won't help your business out financially come January will put your business ahead when the new fiscal year starts and save you from potential financial headaches.