In today’s time, as a small business owner doing taxes can be stressful. You may possibly wear a lot of hats but the last thing on your list would definitely be giving your hard-earned business income to the government. However, there are many key tax strategies that can turn out to be extremely advantageous for you and will help you in making the process of managing and saving money a lot easier and smoother.

The numerous tax planning strategies for small businesses are aimed at the owner’s individual taxes as well as at the business level.

Small business owners should have an effective tax planning strategy  Expert advisors can help you in estimating your personal as well as business income. Seeking the help of experts is of utmost importance as many tax planning strategies will save you money

Here are some ways to save money on your small business taxes.

1. Fund a Retirement Account

As a business owner, there are many retirement account options available that will help you in maximizing your retirement savings and acquiring valuable tax benefits. Be sure that the plan is qualified so you can get the maximum advantage of tax savings. Take into account that the plan is recognized by the IRS.

2. Track Your Expenses
The expenses that are ordinary and necessary means those that needed for the day-to-day operations of the business. These are allowed by the IRS. Although you are required to justify whichever deduction you profess on the taxes, for that you are required to keep records of where you spend your money. Management for keeping receipts can save you a lot of money in the long run.

3. Buy Equipment and Vehicles for Depreciation Deductions
The purchase of equipment, machines, vehicles, and sometimes even real estate for business can take tax write-offs. These write-offs of expenses can be taken in the very first year you own and utilize the equipment. You should consult your tax preparer to cross-check if the asset that you bought qualifies or not.

4. Consider a Tax Status Change

As a business owner, you have many options for structuring your business. You can either operate it as a sole proprietor, in a partnership, as a limited liability company (LLC), or as a corporation.

Whichever business structure you choose will directly impact your taxes. If you feel that your business has grown-out-of the current structure then you should change it to the appropriate structure as per the current situation.

5. Utilize the Qualified Business Income Tax Deduction
The qualified business income(QBI) deduction cut the taxable income by 20%. It is a self-employment tax deduction as you don’t have to do anything out of the box to get eligible for it. You just require a pass-through business- a sole proprietorship, a partnership, or a corporation.

Reduction in taxes can be done with proper management and planning so that as a small business owner you can keep more money working for you. As you are aware that the field of taxation undergoes changes at all times which makes it impossible to keep up with all the changes.

This is why it’s crucial to work with a professional tax accountant and advisor throughout the year to plan for your taxes. When you form a working relationship with someone who knows and understands your business like you, then they will be able to maximize your income and minimize tax liability. Call us on (571) 440-7777 or Email us at info@beyondaccountant.com for more information.