6 Small Business Tax Savings Strategies That Can Save You Big Bucks

As a small business owner, it’s important to keep every penny of your hard-earned money. One way to do that is by taking advantage of the various tax-saving strategies that are available. In this article, we’ll discuss six small business tax savings strategies that can save you big bucks.

1. Claim All Possible Deductions

One of the simplest ways to save on your small business taxes is by claiming all possible deductions. Deductions can include things like office rent, business vehicle expenses, office supplies, travel expenses, and much more. Keep track of all your expenses throughout the year, and consult with a tax professional to ensure you’re not missing any potential deductions.

2. Maximize Retirement Contributions

Another way to save on your small business taxes is by maximizing your retirement contributions. Generally, you can contribute up to $18,500 (as of 2018) to your 401(k) plan, which will be tax-free until you withdraw it in retirement. This can significantly reduce your taxable income, helping you save on taxes.

3. Hire Family Members as Employees

If you have family members who are willing to work for your small business, consider hiring them as employees. This can help you save on taxes in a number of ways. For example, you can claim a deduction for their salaries and benefits, and they may be able to take advantage of tax-deferred retirement accounts.

4. Take Advantage of the Home Office Deduction

If you work from home, consider taking advantage of the home office deduction. This allows you to deduct a portion of your housing expenses (such as rent, mortgage interest, utilities, and insurance) that are directly related to your home office. There are specific requirements for claiming this deduction, so consult with a tax professional to ensure you qualify.

5. Use Section 179 Expensing

Section 179 expensing is a tax code provision that allows businesses to deduct the full cost of certain types of equipment and property purchased or leased during the tax year. This can include things like vehicles, computers, machinery, and much more. By taking advantage of this provision, you can significantly reduce your taxable income.

6. Consult with a Tax Professional

Finally, don’t underestimate the value of consulting with a tax professional. A qualified tax expert can help you identify areas where you may be able to save on taxes, ensure you’re taking advantage of all possible deductions, and help you navigate complex tax laws and regulations.

Conclusion

By implementing these six small business tax savings strategies, you can keep more of your hard-earned money in your pocket. Claim all possible deductions, maximize retirement contributions, consider hiring family members as employees, take advantage of the home office deduction, use Section 179 expensing, and consult with a tax professional. With a little bit of effort and planning, you can save big bucks on your small business taxes.

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