This results in a higher tax liability, which is the opposite of the desired effect.
The tax advantage of LIFO accounting , then, quickly turns into a disadvantage due to the fact that the older, lower costs of inventory are matched with current revenues.
Get accounts on time, then set out a plan with your accountant before the year end or as close as possible to the year end.Essentially, when a company sells a unit of its good or service, the revenue is matched with the newest inventory.The LIFO method is used by companies during periods of rising prices, or periods of rising inflation, when the cost to purchase inventory increases over time.If ending the business is what you want to do, be sure to follow the rules to the letter, to avoid disputes later on. File with the State Sole proprietors don't have to file anything with the state.But obviously, you'll want to resolve any outstanding issues with creditors, suppliers and customers.
Therefore, taking money from your company requires far more consideration and is open to scrutiny.