Business owners spend 41 hours working on taxes every year. For all of those hours, wouldn’t you want to know strategies for reducing taxes?
Paying less in taxes gives you more cash flow that can go towards staff, investments, or your personal life. Money gives you choices, and it’s no wonder why business owners want to save.
You deserve to save money on your taxes for providing jobs and quality service. We will share 10 tips for reducing taxes for your business.
- Track Your Expenses Throughout the Year
Tracking expenses throughout the year makes filing taxes a breeze. You can review your spreadsheet and track each category.
Tracking expenses will help you discover deductibles. You may miss several expenses if you forget to track them throughout the year.
You may not have tracked your expenses last year, but you can start now. That way, you’ll be ahead of the game for the next tax season.
- Get Help from Tax Professionals
Businesses delegate various tasks. Delegation saves time and brings people into your workforce who have vital skills.
You should also delegate your taxes. Tax professionals like Tom Wheelwright can guide you on strategies to save money on your taxes.
Tax professionals can provide an ROI by saving you money. They’ll also save you time by knowing current rules and filing on your behalf.
- Vehicle Deductions
Businesses can deduct miles on their vehicle. You can only deduct miles used for business purposes (getting supplies, driving to a meeting, etc.).
The IRS will require you to distinguish personal, commuting, and business miles.
- Employee Benefits
Employee benefits help you retain talent and attract new workers. Payments you make towards employee benefits also qualify as tax deductions.
Insurance premiums, retirement plans, and other employee benefits qualify for this deductible.
- Sell Unprofitable Investments to Cut Losses
Selling unprofitable investments helps you show losses. Some investors sell stocks for a net loss at the end of the year.
These investors can repurchase the same shares more than 30 days in the future and keep their capital loss. This loss will reduce your taxable income.
- Your Home Office Helps with Reducing Taxes
Many businesses shifted to remote work during the pandemic. Many people set up home offices for the first time. These people created tax deductions for themselves in the process.
Taxpayers meeting certain rules can qualify for a home office tax deduction. Talk with a tax professional to verify if your home office qualifies.
- Internet Fees
Every business relies on the internet to communicate with customers and obtain the latest news. You can use these fees as tax write-offs.
- Phone Service
Document your phone expenses throughout the year. You can use them as deductions to reduce your tax bill.
- Deduct Travel Costs
Did you travel for your business this year? Even if you slipped in some personal experiences, you could deduct costs for business travel.
You can combine personal travel with a business purpose to deduct more costs. You can meet with business colleagues or use the trip to develop content for your brand. Talk with a tax professional to see which costs you can deduct.
- Use Tax Credits
The government offers various tax credits that reward employers for performing specific actions. Tax credits lower your final bill, while deductions lower your taxable income.
Tax credits offer higher savings than deductions. A tax professional can see if you qualify for tax credits and advise you on obtaining more credits in the future.
Get Help with Reducing Taxes
Reducing taxes opens up more opportunities for business owners. They can hire more people, spend more on advertising, and deploy their money towards other initiatives.
Getting the right help can help you save money. If you want more tax strategies, continue reading this blog for additional insights.
