Are you interested in learning how to reduce your tax liability? The answer is simple: tax planning.
Small business owners pay estimated quarterly tax installments to the US government based on a simple calculation. Do not find yourself in the position to pay more taxes come April 15. Strategic tax planning is the best way to optimize your small business revenue in Sarasota!
Here are three reasons why small business tax planning is so important:
Reduction of Taxable Income
There are many ways for a small business owner to reduce taxable income. The simplest way to reduce taxable income for your small business is tax planning. Be proactive about claiming deductions and credits.
Working with a CPA, you can take advantage of planning strategies. This can include contributing to a retirement savings account, health spending account, or other flexible accounts.
When you consistently plan with your accountant, you can take advantage of a lower tax rate when you reduce your taxable income.
Credits and Deductions
Be proactive about claiming deductions and credits to lower your taxable income. Tax laws are always changing, but there are more ways to reduce your tax liability for small businesses.
Tax credits are preferable to tax deductions as they directly reduce the amount of taxes you owe as a small business owner. Some credits available to small businesses are higher education, investment, general business, small employer health insurance premiums, and solar energy.
Deductions only marginally reduce your tax liability. Deductions available to small businesses are deductions for home office, travel expense, medical expense, moving expense, property tax, and health insurance premiums.
Since Corona Virus hit, many tax deductions and credits are now available to your small business. Do not forget to take advantage of these!
Take advantage of various business investments that can reduce your taxes. Or, take advantage of money you saved with a great tax planning strategy.
A great way to reduce your taxes is reinvesting in your small business. What better way to spend your saved money than to grow or expand your business?
Invest in a new vehicle or necessary equipment, or replace existing machinery. Accelerated depreciation on machinery will reduce your taxable income in the year of purchase and for years to come.
Small Business Tax Planning
Tax planning for small businesses is key to those businesses who want to take advantage of all tax deductions and credits available to them. Be sure to avoid errors and apply tax deductions and credits before the deadline, sometimes far before the day your taxes are due.
Planning effectively will reduce both taxes owed on some levels and create a larger tax bill on others. Working with a trained tax accountant will help you grow your business and reduce your tax liability as a while.
Take advantage of an accountant that can achieve your year-end goals with a comprehensive tax planning strategy. To learn more about our small business tax planning services in Sarasota, click here!
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