We cannot escape paying taxes. The amount of taxes subtracted from your income is dependent on how much money made, deductions, etc. We all need to strategize in order to get big savings on our taxes.
Top 7 Tax Saving Tips for Small Business Owners:
Small Business Owners should be very careful while saving money on Taxes. They need to make proper planning to save money on taxes. Here are 7 top tax saving tips for small business owners that will lower their tax bill this year.
DO YOUR TAXES YOURSELF
Although this does not directly affect the amount of taxes you pay, it reduces unnecessary tax-related expense. You don’t need a Certified Public Accounting (CPA) firm or tax preparation services elsewhere. There are several online software such as TurboTax which instruct you on how to do your taxes on your own.
FUND RETIREMENT PLAN
If you find yourself with extra cash, invest in a retirement fund. The more money you divert to your retirement plan makes you eligible for deduction. Seek to advise before taking this step.
DEFER YOUR INCOME
Request that your year-end bonus is received the following year. Since income tax is collected for the year in which income is received, you would not be taxed for the deferred income. This should only be done if it lowers your tax bracket.
MAKE CHARITABLE DONATIONS
Did you know that by donating to a registered charity you pay fewer taxes? This is not a hefty amount but every dollar counts. Donations above standard deduction equal fewer taxes. Pair charitable deductions with other deductions for more savings.
GET A FLEXIBLE SPENDING ACCOUNT
In a Flexible Spending Account (FSA) money is deducted from your taxable income into a separate account for health care and other benefits. This reduces your taxable income. Be careful however because money in this fund is subject to the “use-it-or-lose-it” rule.
HARVEST LOSSES AND GAINS
If you have more loser stocks than gains, sell losers to offset your gains. To do so it is recommended to get the best tax CPA Firm to avoid the Wash Sale rule
GIFT TAX EXCLUSION
You can gift up to $14000 to family members or loved ones tax free. Although the money is no longer yours, you will save money through a tax deduction.
Tax saving is not very difficult and with proper execution can prove quite useful beneficial. For more tax saving tips, visit your local CPA Firm.