Running a small business can be challenging, regardless of how rewarding it is. One aspect of running a company that is particularly stressful is taxes. As an owner of a small business, you’re expected to wear many hats, but certain areas require professional expertise, such as taxes. Like all taxpayers, companies also want to minimize their taxable income by using tax credits and incentives.
Fortunately, there are tax-saving strategies that can reduce your business’s tax liability. If you’re looking to save on taxes this year, the following tips will benefit you.
Maximizing deductions requires awareness of how you spend your business money throughout the year. Proper tracking of receipts makes it simpler to log deductions correctly; it also helps in a business audit. The receipts are proof of the expenses and validate accurate cost reporting.
Tax credits are the government’s way of encouraging taxpayers to become active members of society. The credits act as a bonus encouraging businesses to carry out activities for the greater good of society. For example, you can enjoy tax credits when you hire employees with disabilities or provide health coverage to current employees. Most small businesses enjoy exemptions under the General Business Credit; fortunately, the terms and conditions of the list are pretty extensive, which means your business may fall under some of its terms.
Consider funding options like 401k plans and SBA loans as an alternative option instead of using personal funds. These funding avenues are often less costly than taking out a loan from a bank, and they offer tax benefits such as retirement savings accounts and interest deductions for mortgages. However, it would be helpful to get advice from professional lending companies like Fundwise, operating in Washington DC and nationwide.
Write off Bad Debts to Reduce Income
The year end is a great time to review your customer accounts and observe how well your receipts are doing. If you operate your accounts on an accrual method then you need to identify customers who are unlikely to pay. Write off the amount they owe as bad debt and deduct that amount from your overall income to save on future taxes.
Connect with a Qualified Tax Advisor
One of the best ways to save money is by getting qualified tax advice. A tax consultant can make sure your business filings are done correctly, which may help you save more money down the road.
A business consultant can help you in many ways, such as advising you on all aspects of running a successful company with their expertise in business management. They can also help you in securing funding opportunities through private equity firms.
Fundwise helps young and emerging businesses in Washington DC and nationwide gain the momentum they need by giving them access to multiple funding options. In addition, we ensure that small businesses are ready to take on the financial challenges that lie ahead through sound business consultation and lending services. Apply now to fuel your dreams.