Ways to Save on Small Business Taxes

income-tax-491626_1280While tax day has already come and gone for individuals, there are plenty of procrastinators left. For small business owners, you are required to file quarterly estimated earnings on April 30th, July 31st, October 31st, and January 31st, according to the official IRS schedule. So, that means there’s just about ten days to get your small business quarterly estimated earnings statement ready to submit. Although urgent, there’s still time to use ways to save on small business taxes.

Ways to Save on Small Business Taxes

There are a number of ways to save money in your business. For instance, knowing how to spot a bad vendor so you aren’t stuck with buyer’s remorse and a loss of cash. Outsourcing some tasks to focus on what’s most important is another savvy strategy. Because it’s well-known time is money and wasting time on something instead of growing your business is essentially stepping over dollars to pick up pennies.

Taxes can be stressful for a small business owner. You likely wear many hats and the last thing you want to do is pay more of your hard-earned business income to the government. Thankfully, there are many ways to reduce your taxable liability as a business owner and keep more of that revenue for yourself. First keep in mind to speak with a tax professional before taking action on any suggestions. —Investopedia.com

One of the most obvious ways to save on small business taxes is through corporate giving. These and other allowable write-offs provide a little more relief. And, there are many more options. But, it’s the smart use of certain things which can make a bigger impact. After all, you aren’t required to pay more taxes than the laws states. But taxes are (to say the least) complicated. Although sad, about 9 out of 10 business owners actually overpay. So, use some of these ways to save on small business taxes:

  • Use accountable plans. If your company policy is to reimburse employees for certain expenses, such as travel, equipment, entertainment, meals, and other costs, use an accountable plan. An accountable plan complies with the IRS requirements and provides some tax relief. You can deduct those expenses by not reporting the reimbursements as employee income.
  • Claim smart tax elections. Acquiring equipment and machinery come at a big cost. But, you can use tax elections, up to given dollar amounts. By doing so, you are able to enjoy deductions for future years, even as those assets become more valuable to your company.
  • Remember those carryovers. By the same token, you can also use carryovers to save on future taxes, which include, but are not limited to: capital losses, charitable contributions, general business credits, home office write-offs, and net operating expenses.
  • Consider abandoning property. Did you know you can abandon property for its full amount rather than deducting it as a capital loss? This is done with Section 1231 property and provides more benefits than selling property for a nominal return.
  • Use employee fringe benefit plans. Another way to save on small business taxes is to avoid certain triggers. For example, if you pay for some employee fringe benefits, such as health insurance, educational expenses, transportation costs, meals, other insurance coverage, and more.

What methods do you use to ease your tax burden? How do you minimize other expenses, like operating costs? Do you rely on a tax professional or do your own business taxes? Please share your thoughts and experiences by leaving a comment.

Interested in learning more about business? Then just visit Waters Business Consulting Group. And, be sure to consult an experienced tax professional about these suggestions so you fully comply with the law.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s