Smart Tax Moves To Make Right Now

At no time in American history has it been more important to keep tabs on changes in the tax code--and believe us, plenty are on the way.

Dealing with the impending deluge won't be fun, but better to be prepared and sulking than caught off guard and suddenly short of cash. Meanwhile, there are plenty of moves to make before the end of the year--and certainly by next April.

Assuming your business runs on a calendar year and you want to cut this year's tax bill, you have three basic options: collect less money from customers, increase expenses or both. To what degree you do any of these should depend on how much cash you need today--and what you think President-elect Obama and company have in store for the tax code down the road. (That second part matters a lot to entrepreneurs looking to pass on their fortunes to the next generation.)

In Pictures: 11 Tax Moves To Make Right Now

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If you keep your books on a cash basis, every penny you collect before Dec. 31 will be taxed in April; likewise, every penny you spend will reduce taxable income and shrink your tax bill in four months.

If you keep your books on an accrual basis--meaning that you match revenues and expenses regardless of the timing of cash flows--you have a bit more flexibility. With big changes to the tax code on the way, "clients are asking more questions about the timing of income than ever before," says Mark Nash, a partner at PricewaterhouseCoopers.