Tips on tax reduction for businesses

Tips on tax reduction for businesses

As a business owner, you know that taxes are one of the largest expenses on your balance sheet. If you want to increase your profits and take-home pay, it’s important to understand what kinds of tax deductions are available for businesses so you can reduce the amount of money taken out of your company every year.

First, be sure to maximize any allowable retirement plans offered by your business or industry association. These include SEP-IRAs (Simplified Employee Pension – Individual Retirement Accounts), SIMPLE IRAs (Savings Incentive Match Plan for Employees), 401(k)s (deferred compensation).

Next, take advantage of any other retirement plan your business offers, such as a 401(k) or profit-sharing. If you contribute to these plans and reduce your taxable income for the year, it can help you lower your tax rate and increase take-home pay. You should also consider hiring employees if the business is eligible for this benefit.

Also, hiring a professional tax accountant such as Potter & LaMarca can help you navigate the various deductions and benefits available to your business. An accountant can help you understand which deductions are most beneficial to maximize your business. They can also help you determine if incorporating your business or taking other steps to increase personal assets might be the best tax-reduction strategy for your situation.

Finally, the most important tax deduction for businesses is to take advantage of all allowable business expenses. As a small business owner, you might be able to deduct things like vehicle use, travel, and entertainment costs from your taxes as well as work-related education or supplies that are used in daily operations.

If you are interested in learning more about how you can reduce your business’ tax bill, click here to speak with one of the tax professionals at Potter & LaMarca.