Everybody wants to lower the amount they pay in taxes, right?? If you’re a small business owner, this is an especially important goal. Every penny in taxes avoided is a double victory – you avoid overpaying AND add to your bottom line.
Here are 7 tips to use in 2019 to take advantage of potential savings:
Use your home office to your advantage. Figuring out the right amount may take some time to calculate, but the savings could be totally worth it!
Your vehicle expenses are another potential deduction. There are two ways you can do this – the first is the actual expense method which means you need to track the actual expenses and miles traveled; the second is to apply the optional mileage rate to the business miles traveled.
Start keeping all of your receipts! Any money you spend that goes towards operating your business is a potential offset and deduction you can include.
Save for your future while saving on your taxable income! Set yourself up for success now AND later by putting a portion of your (hopefully extra!) income into a retirement fund. THEN DON’T TOUCH IT!! Many of our clients became clients for this very reason: they borrowed from their retirement accounts early and had ZERO taxes withheld. Trust us, doing this will ADD lots of 000000s to a tax debt!
Give family members a job to do and save on taxes at the same time. Sidenote: only if you can show that the relative is doing something essential for your business can you take a business deduction on what you’re paying them!
Don’t forget about your equipment! IRC Sec 179 allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.
Don’t forget about your carryovers! There are many situations when the credits or deductions that you’re entitled to can’t be used in a single tax year. With taxes and complexity, it’s wise to contact our office at 855-477-2255 to make sure you are taking full advantage of the tax code!!