Whether big or small, running a successful business is no joke. You need to keep track of many aspects, and when it comes to filing for taxes, entrepreneurship gets trickier.
There’s no denying that taxes can be a stressful and tedious process for any business owner. With the variety of hats you put on, tasks you accomplish, and the effort you put into your work, the last thing you want is for the government to take all your hard-earned money.
Fret not; there are many tax-saving strategies and ways to minimize or reduce your tax liability as a business owner.
In this blog, we’ll break down all the legal ways you can minimize your business tax and enjoy all the fruits of your labor.
Start and fund a retirement plan
One foolproof way to secure your business and your future is by setting up and funding a retirement plan. It can help you save money on taxes and come in handy when you’re old and no longer able to work.
However, before you sign up for a retirement plan, make sure it’s a qualified plan that the IRS recognizes. Depending on your business and need, there are various contribution plans available such as a 401(k) or 403(b).
If you’re unsure which retirement plan you should opt for, consider contacting a tax solutions company in your area.
Employ family members
When it comes to minimizing small business taxes, employing family members can be an effective strategy.
The benefit of hiring your family members isn’t just limited to additional help; the Internal Revenue Service (IRS) also offers various options, all with a plethora of potential benefits, sheltering your business income from the government and taxes.
You can also hire children and teenagers to help you around with work, pay them their fair income, and eliminate the cost from your business taxes. It’s a win-win strategy for all; you get to enjoy reduced taxes and the children are compensated for their hard work and labor.
Save medical fees
Putting money aside for your medical or healthcare needs is a great way to reduce small business taxes. As medical and healthcare costs continue to skyrocket, you need a backup plan to cover the expenses in case of an accident or any emergencies.
If you have an eligible high-deductible health plan, you can easily accomplish this through a Health Savings Account (HSA). Doing so will ensure your and your employees can minimize taxes and reduce medical costs whenever they incur.
Write off bad debts
Bad debts occur when a client or debtor is unable or refuses to pay for the goods and services you’ve provided. It includes everyone from vendors, employees who owe you and haven’t paid back to clients who haven’t repaid their loans.
Before you finish filing for taxes, review all your customer accounts and find customers who might not pay. You can then write these amounts as bad debts and deduct them from your business income to reduce taxes.
If you’re looking for small business tax preparation and planning services in West Palm Beach, we’re the tax relief company for you!
At Advanced Tax Defense and Accounting, we offer our accounting, bookkeeping, consulting, outsourcing, payroll, and business services to ensure all your financial records are in order.
For more information about our services, reach out to us.