6 effective strategies to save on business taxes

Taxes are undoubtedly an important part of the business. The owners are required to be aware of what they have to pay and when it is due. It turns out to be stressful, but proper planning can definitely help them file timely and also claim for right deductions. Here follows the list of 6 effective strategies that can help to reduce the taxable liability for them:

1. DEDUCT GIFTS, BONUSES, AND AWARDS

The business owners may be able to subtract the part of gifts given to customers, vendors, and employees. Additionally, the awards and bonuses granted to staff can also be deducted. All of them have limits and restrictions, which means that they are to be read carefully before implying. However, the best way out is to begin with the google search on the business tax accountant near me.

2. RETIREMENT PLAN:

It is quite simple for small business owners to set up a retirement plan for their employees. There are several options that can optimize saving and then get valuable tax benefits. For instance, one-participant 401(k) plan, with it the IRS allows them to keep away up to $57,000 towards the contribution for the plan. Some of the other ways are Roth IRA or IRS, Simplified Employee Pension Plan, 403(b) plans.

3. THE HEALTH CARE NEEDS

Another way to lessen the taxes for small businesses is to keep the money for healthcare needs. As medical costs are increasing continuously, it has become quintessential to save for health care needs. One of the ways to accomplish it is with an (HSA) Health Savings Account, in case if the business is eligible for a high-deductible health plan.

4. WRITE OFF BAD DEBTS

If the business runs on the accrual method of accounting, yearend is the time to analyze the customer accounts. So the first thing to be done is to look for the customers who are not going to pay. The money they owe can be written as bad debts and this amount can be deducted from the income of the firm to save taxes.

5. TIMING INCOME AND EXPENSES OF THE BUSINESS

Timing income is a way to move earnings from one year to the next. Firstly, they need to find out the year that will have a lot of taxes, due to two factors, the business tax rates, and business revenue. After this, the owners can consult their tax advisors about it. The same thing goes with timing expenses, the only difference is it works in reverse.

6. TAX PROFESSIONAL

Before deciding on anything that can impact the business tax return, the wisest thing is to consult the tax professionals. Also, it is important to find someone to help throughout the year. The best bet is hiring the CPA firms, as the team of professionals working over there employ their expertise to help save in the best possible ways.

THE FINAL WORDS

With proper planning and wise steps, small business owners can reduce the taxable income and save more money to work for them. The only thing to be taken care of is, to begin with, searching business tax accountant New York. Consulting the CPA firms make sure to qualify for possible and ethical savings.

Sarah K, a professional writer who share interests in different creative niches. Her ideas and tips towards such niches have contributed to the online community.