This is something that every business owner thinks about multiple times during their business’s existence – how can I save as much money as possible on my taxes? You know that it’s your duty as a citizen to pay the proper taxes to the government. This lets the government pay for things such as good schools and infrastructure around the country. However, it can be tough to shell out so much money every year, when you could be using that money to make your business more successful and bring in more profit.
Well, the good news for you is that there are plenty of ways that you can save a fortune on your taxes every year. There are simple hacks out there in terms of what deductions you can make on your taxes. Make sure to keep reading down below to learn more about these deductions and how your business can take advantage of them.
1. Deduction – Retirement Contributions
The first deduction we’re going to talk about is retirement contributions. One of the biggest advantages of running a small business is the fact that you can choose a retirement plan based on your own needs and desires. You can feel free to shop around for different retirement plans that will achieve what you’re looking for.
However, did you know that which retirement plan you choose can also help out with your annual tax returns? If you choose a deductible retirement plan, then you can save on taxes by contributing to it. How great would that be? This is a great way to plan for the future and to help out your business in the present, as well.
2. Deduction – Taxes
Did you know that many of the taxes that you pay over the course of your business’s life-span can be deducted as business expenses? Great news, right? In fact, some of the taxes that you pay are already included in your business expenses. Some examples of these taxes are the tax that you pay on real estate, federal and state payroll taxes, and the tax you pay on the fuel you use for your company fleet.
Make sure you speak with a qualified tax professional to get more information about what taxes you can deduct as business expenses the next time that tax season comes around. This is going to help your business out a ton when you can get this money back as a tax refund.
3. Deduction – Tax Preparation Fees
Next up we have the tax preparation fees, another potential deduction that could save your business tons of cash every single year. This is one that you probably don’t think about right off the bat when thinking about potential deductions you could make. When you prepare your taxes, you are likely paying fees for the services that you purchase to get them done or for other preparation-related fees. Add these up and you can add them to your tax deductions to save a bunch on your taxes every single year.
And don’t think these tax preparation fees only include the fees that you incurred when you did them yourself. You can also include the preparation fees that you incurred when you had an external service do your taxes for you. If you incurred expenses when filing for income tax returns, you can mark off the fees that you paid to get that service.
While dealing with all the way to save money on taxes, don’t compromise on work that needs to be done. For example, make sure that you keep your books up-to-date and avoid making bad or double entries as you can face serious tax penalties including a federal prison sentence due to failure of filing taxes while having bad books and records.
4. Deduction – Employee Benefits
If you are doing business right, then you are providing your employees with lots of benefits that help them out in all kinds of ways. Everything from dental work to pension plans are the types of benefits that you might be providing to your employees. Did you know that benefits like these can also be potentially deducted from your taxes every year? This is definitely going to be good news for you, as we are aware how much these benefits cost your company to pay out.
Think about the various benefits that you might be able to deduct. What about dependent care assistance? Or the educational assistance you provide your employees through free educational lessons online? You can even deduct the costs of your cafeteria plans, as this is definitely a benefit that employees take advantage of every day at work. Be sure to go through all of the benefits that you provide and determine which are qualified to be marked as tax deductions next time tax season rolls around.
5. Deduction – Vehicle Expenses
One of the biggest valuable deductions that you can mark off on your taxes might just come from the vehicles you drive around for work every day. No matter if you have one car in your fleet or if you’re a company with tons of trucks delivering shipments, the expenses for your vehicles could be deducted from your taxes. Make sure to always track the miles on the cars you drive to the store for office supplies, another business to talk about a partnership, or to an event that is going to help out your company. These miles can add up to some serious deductions on your taxes.
There are plenty of other expenses that you can track when you drive a company car, as well. For example, you don’t just have to write down the gas costs you incur. You can also write down the cost for oil, depreciation, lease payments and even all kinds of business insurance. All of these actual expenses can lead to some serious pocket change once tax season rolls around again. Even if you’re running your business from your home, make sure you track the miles anytime you leave your home for business.
And there you have it! Did you know that all of these potential deductions are available for you to take advantage of when tax season rolls around? We bet you didn’t! Many business owners just aren’t aware of how much they could be saving on their taxes every single year. Why would you shell out more to Uncle Sam than you have to? Keep that money in your pocket for the more important things to improve your business.