Every dollar counts when it comes to running a small business. You have to make things stretch until you see enough growth that finances don’t feel quite as tight. That means that you’re looking for ways to save and your taxes is one place small businesses can shine. Tax savings is a huge benefit to running your own small business. When you put some tax planning in place, it can help you maximize your savings and keep that hard-earned money in your pocket. Propel Your Accounting is here to share some tax planning strategies that will help you maximize your savings.
Take Advantage of Business Tax Deductions
There are tax deductions that business owners can take advantage of that will help lower their taxable income. While there are many, a few of them are the most common deductions that can fit a wide range of small business owners.
– Home Office- Many small businesses operate somewhat from home. If you have a designated space in your home where only business is happening, a portion of your home expenses can be deducted from your taxable income.
– Vehicle: Another common deduction for small business owner is driving expenses. If you have a vehicle that you use for your business, you could be deducting fuel, miles, and maintenance on that vehicle.
– Salaries & Wages: If you have any employees, their salaries and wages can often be deducted from your taxable income as well.
Don’t Forget Tax Credits
Tax credits are there for the taking for small businesses. They are designed to help lower the taxable income of small businesses. Some to take note of include:
– Research & Development: To encourage further research and development as well as innovation, there is a research and development credit for those that are engaged in qualifying research activities.
– Work Opportunity: This credit helps incentivize small businesses to hire individuals from certain target groups.
Year-End Tax Planning
It is important to remember that you are planning all year long for tax season. It is important that you are setting money aside to help you cover any taxes that could be owed from you. At the year’s end, it is a good time to go over all the credits and deductions with your accountant to make sure that you are taking advantage of any that you qualify for. Keeping excellent records throughout the year is going to be the biggest help in setting you up for tax season.
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you are having a difficult time staying on top of bookkeeping and record keeping for your small business, it may be time to turn to the pros at Propel Your Accounting to help you keep the records required to take advantage of some of these credits and deductions. We want to help your small business succeed and that comes from saving where you can. Call us today!
