There is a couple of helpful tips with which you can save money on business taxes. Even though this is not a guarantee that you will get a refund, it might qualify you for some reductions.
When you take advantage of expenses and timing income, you should do that before the year runs out. This and some tips are what we will discuss in this article
There are a couple of tips that can reduce your business tax bills from the 2017 Tax Cuts and Jobs Act which was effected in 2018.
Businesses that are pass-through entities, for instance, could qualify for the 20% deduction on the net business income. This is applicable to businesses that are not a corporation, and the deduction is alongside ordinary business expense deduction.
Part of the requirements to qualify is to have a taxable income of less than $157,500 as a single, and for married folks filing jointly, an income of $315,000. It also comes with a couple of restrictions; hence be sure to communicate with your tax professional to discuss your eligibility.
One thoughtful way to save money is to have a retirement plan set up for you and your workers. As long as the IRS qualifies the plan, you will surely get the advantage of tax saving
Yes, the government needs tax as a means of building infrastructure and funding public service organizations like fire service. It also knows that excess tax could affect a business's chances of survival. This is why the tax break comes as a form of encouragement for businesses to grow.
There are many tax credit you can take as a small business. For instance, you can take a tax credit for using a specific type of appliance (tankless water heater), hiring workers, going green, giving health coverage for workers.
Every year, businesses have the opportunity to have write-offs on any business equipment purchase. The good news is that you can take these write-offs on time as pieces of equipment typically depreciate from the first year of purchase.
Here are the two most common types of depreciation:
Be sure to discuss with your tax professional as the depreciation programs have been increased.
When you give gifts to your workers and customers, there is a provision to deduct some of the costs. You can also deduct bonuses and awards to workers.
There are, however, restrictions and limits to these deductions; hence be sure to understand them before making your move. Even business owners can qualify for bonuses.
You can move your income from a year to another by timing your business income. To do this, you need to know the year in which you will pay the highest tax. You can determine this based on two factors:
Like business expenses, you can time your profit as well. This, however, works in reverse because the expense will have to be included in the year where you had the highest tax to reduce income. Another way to minimize income and boost expense is by stocking on supplies.
For a business operating on the accrual accounting method, you need to review your customer's account at the year-end. The first step is to determine customers that will not pay. After this, you can write their debt off as "bad debts." You can save on taxes by deducting the amount from your business income.
On a final note, it is essential to carry a tax professional along on everything you are doing to save on taxes. The person you are working with should be able to help you all through the year.
KB Tax Deviser CPAs