When you start a small business, you’ll need to stay ahead of the game with the way you handle your finances and obligations.
For starters, put some tax strategies together that will help you pay the government and keep your business afloat. By considering the strategies that’ll help you handle your obligations, you’re better able to let your business grow the way it’s supposed to.
Follow these strategies to get the help that you need with your business taxes.
1. Get Strategic and Diligent About Your Expense Deductions
The first thing you’ll need to know about tax strategies is how you can get deductions. Since you have expenses that eat into your budget, it’s only right that you get a return on this by reducing your tax bill.
To reduce your tax bill, you will need to keep track of your deductible expenses. Some examples of these deductions include business utilities, supplies, office mortgage or rent, travel, and education.
These are the deductions that will help your business keep more cash flow.
2. Save Your Tax Money in a Separate Account and Pay Quarterly
You’ll save yourself a lot of trouble by paying estimated taxes each quarter.
To keep track of your tax money, you will want to open a separate bank account in which you only put tax money aside. That way you won’t be tempted to spend it and will handle your taxes on time.
Paying your taxes early requires preparation, so don’t cut corners.
3. Ensure You Have the Right Business Designation
Small businesses can be filed under several different designations, to include sole proprietorship, Limited Liability Company (LLC), and general partnership. As such, each business type has different tax considerations and obligations.
For example, a sole proprietorship will still involve self-employment taxes, while other small business types will require you to pay taxes on your employees. Choose the business designation that is both accurate and advantageous to your company.
4. Understand the More In-Depth Deductions You’re Entitled To
There are always deductions that you might be entitled to that you aren’t aware of. Each year the federal and state government put out new tax credits, so you will need to get in touch with a certified public accountant (CPA) that can help you take advantage of them.
You’ll also need to be aware of potential tax implications for everything from health insurance to stock options.
5. Keep Track of all Your Records
Being organized is the name of the game when it comes to running a small business. You should keep tabs on all your paperwork and also be sure that you keep digital records.
For example, if you outsource projects to independent contractors, be sure that you keep track of all your 1099 documents. Never throw away your tax returns, as you never know when you’ll need to reference them.
Consider These Tax Strategies For Your Small Business
There are several tax strategies you’ll want to employ when you are trying to do right by your small business. Mastering this info will help your company thrive.
Think about these tips and stay tuned to our content for more info on investment banking, taxes and so much more.