Gas prices and inflation are high and supply chain issues are driving the prices up for businesses everywhere. That means small businesses in particular are looking for ways to cut costs. And that means now is a perfect time to employ some proven strategies to lower your business taxes. Leveraging ‘Expense’ vs. ‘Depreciate’ There are many cases where you may be allowed to choose to claim business expenses as either expense (deductions) or depreciation. Your business taxes should reflect your business in its entirety, and that might mean spending some more time on those taxes or talking at length with your accounting department, CPA, or other tax services provider. When you are considering whether to expense or depreciate the assets or equipment you just bought, there are several things to think about. This mostly applies to larger purchases. For example, if you bought some used office equipment for your business and it cost you $200-300, depreciating that over a few years isn’t going to help much. But if you just spent thousands of dollars on a company vehicle, or you purchased new machinery or equipment because you are experiencing (and expect to continue experiencing) substantial growth, depreciating those assets over a few years rather than giving yourself one big year of deductions could actually be more beneficial, especially if the growth means you’ll end up moving into a higher tax bracket. Expanding Employee Benefits It may seem counterintuitive that expanding the employee benefits your business offers could result in a lower tax bill, but there are several reasons why this is possible. Keep in mind that every business’s setup is different, so it’s important to weigh the costs and viability of adding benefits to your employee’s current contract or incentives package. There are some tax laws that have taken reimbursement incentives away from individuals, but they can still be claimed on business taxes. By transferring that reimbursement to …
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