The reasons for an enterprise to reduce its business taxes are simple. Every business owner should want to have more money to live on, to run his/her enterprise, and to grow. That can be accomplished in part by sending less of the business’s income to the government.
7 Strategies to Reduce Your Business Taxes
Here are 7 suggested strategies to reduce business taxes:
Take all available approved tax credits to lower the income of the business. These include credits under the General Business Credit for hiring employees, going green, providing improved business access for disabled employees and customers, and providing health insurance to employees.
Take the Qualified Business Income Deduction (QBI) which was created by the Tax Cuts and Jobs Act (TJCA) of 2018. This applies to businesses that qualify as a pass-through entity such as a sole proprietorship an S corporation, or a partnership that is passing income and deductions to owners, shareholders, or partners.
Fund a qualified retirement plan for owners and/or employees.
Take appropriate tax write-offs for purchases of machinery, equipment, and vehicles.
Deduct the costs of gifts, up to $25 per person, given to vendors and customers. These gifts must cost more than $4 and go beyond normal promotional distribution.
Select the best timing for your deductible business expenses to offset income in the most favorable way.
Write off bad debts to reduce income.
Good Practices Leading to Lower Business Tax Payments
It is always essential to keep accurate records and to keep records in a timely, up-to-date fashion. In addition, pay attention to tax issues all year long, not just at tax time. Never rush to get taxes done and be sure to pay on time. A key to success is to use a professional tax advisor.
Seek Expert Financial Assistance
To meet the financial needs of your business, contact JHF Capital, based in Rehoboth Beach, DE. We offer customized financing tailored to your needs, with access to virtually every financing product available on the market!