How To Minimize Small Business Taxes
Learn how to minimize small business taxes the easy way. There are many complicated ways to reduce taxes, which are done by the professionals. If you don’t have thousands of dollars to spend on Attorneys and CPA’s, these simple guidelines will help more. Reducing your small business taxes can be as simple as going online.
- Taxes Online. The easiest way to minimize small business taxes is with a professional online tax website. There are many that will help you do your entire tax preparation online, for a fee of course. Just follow the step-by-step instructions. Look for a company that will let your try before you buy.
- Forget the Free Ones. On a survey that was done by a professional small business owner, the free taxes offered on E-File ended up charging much more in the end. A professional tax preparation service that charges a fee and specializes in saving the taxpayer money is better and the fee is deductible the next year.
- Keep Good Records. One of the most essential ways to minimize small business taxes is by keeping good records. Many times legitimate deductions are not included in the taxes, due to the taxpayer not having proper receipts and calculations.
- In Home Tax Deduction. Many online tax services will tell you that a good way to minimize small business taxes is with a home office deduction. This is a red light to the IRS and should only be used if necessary and can be proven that this room is used solely for business.
- Up to Date Information. Whether following a top notch CPA who sends out monthly newsletters or reading news bulletins on the government websites, keep up to date tax knowledge. Many of the top tax preparation sites have the latest tax changes for the current year. Minimize small business taxes the easy way with free newsletters.
- Cash is the Best. A business that pays cash will minimize money spent and keep all money in hand. Although interest is deductible, it is not a smart way to do business. Cash in the bank will help any small business prosper.
- Forget About the Income Tax Loan. Income tax loans charge form 250 to 2000% on an income tax loan. Although the income tax loan is for a short period of time, it is not smart. The interest is taken out of the refund and it is not a way to minimize small business taxes.
- Automobile Deductions. If you buy energy/water equipment for your automobile, then 100% of the cost is deductible. Gas, repairs, insurance and interest are all deductible on company cars.
- Buying Office Equipment and Supplies. On small purchases, such as computers, you have the choice of taking the full amount of the purchase off your taxes or amortizing the amount over the next few years. If you owe tax this year, deduct the full amount now. Make sure to make a list of all deductible items ahead of doing your taxes so nothing is left out.
- Pay Taxes When Due. The best way to minimize business taxes is to pay the tax when due. Late taxes require late payments and interest. The IRS has repayment plans, but they all come with penalties. Many times an advance on a credit card can be cheaper than to take out an IRS payment plan.