Use the Accrual Method?

Tax tips for business owners

Business owners using the accrual method also have some specifictax-saving steps they can follow. Review your accounts receivableif you are an accrual taxpayer to see if anything is partiallyworthless. If it is, you can take a deduction for a portion of theamount of the uncollected debt. Check with your accountant todetermine whether you meet IRS requirements to claim a bad-debtdeduction. Also scrutinize your inventory for obsolete items. Ifyou dispose of the inventory or sell it below cost by the end ofthis year, you can receive a deduction.

Another strategy for businesses using the accrual method is todelay shipping products or providing services until the beginningof your 2003 tax year.

Source: "GetYour Tax Straight"

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