Running a small business is an Olympian feat, so why not take the easy road on some of those complicated tax items? Here are some great tax hacks for small businesses.
Pay Attention to the Tax Calendar
One of the easiest ways to save money on your taxes as a small business is to make sure you don’t miss any tax deadlines throughout the year. Often, missing a deadline results in penalties and extra fees, which take money out of your business or your pockets.
Mark important dates on a physical or electronic calendar, and set up automatic payments if you can.
Start Planning For Retirement
Have you set your retirement goals? If you haven’t you should.
If you invest more into your retirement today, you can often end up with larger tax benefits. Make the most of your expenses by looking into the benefits of upping your retirement savings this year.
If You Can, Go for the Home Office Deduction
The home office deduction is a tricky one. But that doesn’t mean it isn’t worth looking into.
If you have a home office, whether it looks like a professional office or it’s a modified closet, you can take this deduction if you use that space solely for your business.
That means the kitchen table, family laptop setup will not be eligible. But if you have electronics or office furniture that you use for the sole purpose of doing work for your business, it is included in the deduction.
There is a new, easier caveat to the home office deduction: rather than figuring out a percentage of your expenses to deduct based on the home space you use for your business, you can simply multiply the square footage of your office (up to 350 feet) by $5, and just deduct that dollar amount.
Do Some Good Research on Deductions and Tax Credits
There are always ways to optimize your business to secure refunds, or at least to avoid owing taxes after filing. Whether you want to take a deep dive into the IRS tax code or you want to invite your favorite tax professional to lunch, taking some time to review what tax
credits and deductions are available to you and your business can help tip the tax scales in your favor.
Check out our previous blog articles on deductions for small business owners and 6 small business tax credits you should take advantage of.
Make Your Business a Family Affair
You need employees you can trust, so why not start by hiring your spouse or children?
WalletGenius has some excellent points about how hiring your children and paying them a small wage (say enough to cover a cell phone bill or new tablet, sports gear, or other big-ticket items) so you don’t have to pay Social Security or federal unemployment tax if they’re under a certain age.
And hiring a spouse means you can write off their wages and family health insurance plan!
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