Taxes are something every person and every business needs to pay unless you want to end up bankrupt and possibly even in prison. Tax evasion is a bad thing, but you don’t have to avoid your taxes if you take some time to work on saving on them.
For self-employed people, or those that do at least some of their work at home, there are many advantages because you can use your home businesses expenses to save money on taxes. But, if your small business is a bit bigger, you still have options for saving money on taxes.
Individuals and businesses can save some money on their taxes by being charitable. Whether you are donating stuff to the local thrift store or you are donating a check to a bigger charity, make sure you get a donation receipt and keep track of the monetary value of what you donate.
You’ll need to look into how much you can legally claim in donations each year before you say you donated a million dollars, but your donations can get you a tax break. Plus, it just might make you feel better about yourself to know that your business has donated to help out a good cause.
Raise Benefits Instead Of Salaries
You can save some money on business taxes if you raise the amount of money you give your employees in benefits rather than giving them pay raises. While many employees might rather have some extra cash in their pockets, others may be happier to have some extra money in their medical fund.
Obviously, if you like your employees, you may want to make sure they are happy with this deal before you deny them a raise.
Set Up an “Accountable Plan”
You can do some things that help save your employees money on their income taxes, and help you save some on payroll taxes. Businesses have so many different types of taxes, why not save wherever you can?
An accountable plan lets you reimburse your employees for expenses, like travel expenses, without it counting as income. These particular reimbursements don’t show up on the employee’s W2.
Make Contributions to Employees
Businesses don’t have to pay taxes on contributions to their employees retirement funds. That’s a good way to put some of that income away to avoid a little bit of excess taxes, and it gives your employees a little something more. It’s a win-win situation.
Your employees will likely enjoy getting some extra money towards someday retiring and having a chance to do something other than going to work and punching the clock every day.
Look Into Available Tax Credits
ADP business tax credits and incentives are a great way to help your business get the lowest possible tax rates. Take some time to do the research and find out what tax credits are available. Different types of businesses may be eligible for different credits.
Your tax preparer or accountant is likely to be very knowledgeable in what in what tax breaks are available for your business, just make sure you let them know that you are interested in saving as much as possible.
Don’t settle for paying the highest tax rates for your business. Take some time to find discounts and learn about ways that you can cut those taxes.