by Susan Paige
As a business owner, you understand the importance of minimizing your tax liability. However, with all the confusing jargon out there and misinformation from friends and family, it can be hard to know how to pick the best tax preparers for your company and how to lower these taxes. You can consider numerous options to lower your tax and sail through business with fewer tax burdens. We will discuss five simple tips on how you can reduce taxes legally as a small business owner.
Use a Tax Software
Ensure that your business uses reputable and secure tax software to file taxes. In the past, businesses would have to pay expensive rates for accountants or lawyers to file their taxes, which was time-consuming and cost them thousands of dollars.
Luckily, there has been an increase in affordable options for small businesses who want to file their taxes without spending a fortune. Tax software is one of these options, and it can be easily found online or at your local office supply store. Not only will this save you time, but it will also help ensure that your business is filing its taxes correctly.
Use Your Home Office for Deduction Purposes
If you are using a room in your home as an office, you can deduct a percentage of your mortgage or rent payments, as well as utilities and other related expenses. The office must be used regularly and exclusively for business purposes to qualify for this deduction. This helps you enjoy some tax relief while also working from home.
Take Advantage of Other Business Tax Deductions
Besides home office deductions, there are several other business deductions that you can take advantage of to reduce your taxable income. These include things like the cost of equipment, travel expenses, and advertising costs. Be sure to keep track of all business-related expenses so that you can claim them on your tax return.
Hire a Tax Professional
When it comes to taxes, it can be challenging to know everything. That’s why it may be wise to hire a tax professional, like Pherrus Financial, who can help you navigate the complex world of taxation and ensure that you are taking advantage of all available deductions and credits. This could save you a significant amount of money and help you save on your taxes.
Employ Qualified Family Members
Another way to reduce your taxes is by hiring qualified family members. You can hire your spouse, children, parents, or other relatives if you are not doing it to avoid payment of employment insurance premiums. When filing your taxes, this will be considered taxable benefits on their T-slips and must be reported under the Other Income category. Working with a family member like your spouse can also help you double up the money you contribute to your retirement accounts and get out of unnecessary debts.
There are many ways to reduce your taxes, and the ones above are just a few of them. Keep in mind that you should always consult with an accountant or tax specialist to see what other methods might be available to you, depending on your specific situation. It’s never too early to start planning for your tax bill.