No one understands the old saying “you have to spend money to make money” more than a small business owner. Running a small business does involve a lot of expenses – so finding ways to save money is key to long-term success.
One of the biggest financial obligations for small business owners is taxes. By implementing a solid tax-planning strategy, you can avoid unpleasant surprises on your tax bill and keep your business’s bottom line healthy.
Neely’s Top Small Business Tax Planning Tips
Here are eight strategies to help you develop a solid tax planning strategy for your small business.
- Choose the right business structure: Whether you’re a sole proprietor or an LLC, the structure you choose can have a significant impact on your taxes. Each comes with its own tax advantages and liabilities, and it’s best to consult with the experts at a professional tax service to fully understand the implications of each.
- Take advantage of deductions: Deduct expenses such as office supplies, equipment, and business travel. Don’t overlook deductions for home offices or vehicle use. And be aware that some deductions, such for a home office or for capital losses, could carried forward for use in a future year.
- Hire family members: Hiring family members, especially children, can reduce your taxable income while keeping payroll in the family.
- Maximize retirement contributions: Retirement plan contributions not only secure your future but also reduces your taxable income. Maximize contributions that are made pre-tax, meaning your paycheck has less taxable income on it each pay period. A tax consultant can help.
- Utilize tax credits: Take advantage of available tax credits, such as the small business health care tax credit or research and development credit, to further lower your tax bill.
- Stay informed about tax law changes: Tax laws are complicated and can see significant changes from year to year. Keep up with the latest rules to avoid penalties and take advantage of new tax-saving opportunities.
- Employ tax-efficient business practices: Use strategies like delaying or accelerating income and expenses to reduce your tax liability each year.
- Hire a professional CPA firm: We said it before: Taxes are complicated. Working with tax professionals ensures you’re maximizing every opportunity to save and avoiding surprises.
Get Tax Help for Your Small Business with Neely’s
Don’t leave your small business taxes to chance. When you need tax services in Roanoke, Neely Accounting Services is your trusted local advisor. We have a deep understanding of tax laws, small business needs and tax solutions that work. Work with the professional Roanoke CPAs at Neely’s to keep your small business tax plan on track.