What are the secret business tax strategies of the most successful companies? Following these closed-lip tips will keep your taxes and finances in order.
Behind every great company are equally great business tax strategies. Turning a profit feels amazing, but higher revenues also mean paying more in taxes. You don’t want to give Uncle Sam a single dime more than necessary. With a little planning and some expert help, it may be possible to reduce your tax burden.
Here are the top 5 strategies to implement in your company:
#1: Organize Any and All Business Deductions
Want to lower how much you owe the IRS? You need to make sure you claim every legitimate business deduction. It’s best to keep track of your deductions throughout the year—you don’t want to dig through a pile of receipts come tax season.
What can you deduct? The list of allowable expenses is long. You’ll want to keep track of travel expenses, such as vehicle mileage and airfare. Client meals, supplies, repairs, moving expenses, and certain subscriptions may also qualify. Just make sure you keep a paper trail of every expense in case the IRS chooses you for an audit.
#2: Make Plans for the Future
Business owners often get stuck in the present. While you need to know where your company stands today, the future is also essential. Long-term planning should be on your mind. Where do you see your business 5-10 years from now? Creating a plan will help you make wiser investment decisions today. It should also include an exit strategy for when you want to leave. Depending on how you envision your company’s future, this strategy may even lower your tax load.
#3: Revisit Your Business Structure
Are you still acting as a sole proprietorship? If so, you may be writing bigger tax checks than you should. As companies grow, the way they operate may change as well. The IRS uses five business structures to classify businesses.
The business structure you select determines which tax return form you file. And choosing the right one could make you eligible for more money-saving deductions. For instance, corporations can deduct salaries, payroll taxes, and insurance premiums. A tax expert can determine which business structure is right for your company.
#4: Stay Up-to-Date on the Latest Tax Cuts
The number one way to reduce your taxes is by taking advantage of every available tax cut. Politicians rewrite the tax code every chance they get. After all, lowering taxes is a surefire way to win an election. Many of these tax breaks benefit small and large businesses the most. Consider it free money in your company’s bank account. A tax expert can help sort out which ones apply to you.
#5: Leave Tax Preparation to the Experts
As a business owner, you wear many hats. Tax preparation doesn’t have to be one of them. Turning your taxes over to an expert will ensure you never fill out forms incorrectly or miss a filing deadline. And you won’t have to worry about paying Uncle Sam too much.
Incompass Tax, Estate & Business Solutions makes managing your company’s taxes a breeze. With over 30 years of experience, we can handle any tax situation. Schedule a consultation to find out which business tax strategies will save your company the most.