How to save money on your business taxes by considering these 10 tax-saving tips.
Setting up and funding a retirement plan for yourself and employees can save you money on taxes, and it's easier than you might think. Just make sure it's a qualified plan (qualified by the IRS, that is), so you can take advantage of those tax savings.
If you hire previously unemployed workers, you can take a tax credit based on their Social Security amount for the rest of 2010. The sooner you hire, the more your tax credit.
You may be able to deduct part of the cost of giving gifts to employees, customers, and vendors. In addition, you may deduct awards and bonuses to employees. All deductions have restrictions and limits so read carefully and consult your tax advisor before making any decisions.
Review your current expenses and, if you think you can benefit from reduced income, prepay some of those amounts. You can also increase expenses (and decrease income) by stocking up on supplies.
Another way to cut taxes is to write off obsolete equipment and inventory that has lost its value. These write-offs reduce your cost of goods sold and can decrease your net income.
The end of the year is the time to review your customer accounts to find those customers who aren't going to pay. You can write off the amounts they owe as "bad debts," and deduct these amounts from your business income to save on taxes.
Owners of corporations and top executives can receive bonuses and the company can get a tax deduction for these bonuses. Read more about how this works.
Timing income is a method of moving income from one year to another. You first have to determine which year will have the highest taxes, because of two factors (1) your business income, (2) business tax rates. So get out your crystal ball and talk to your tax advisor about this one.
Timing expenses works the same way as timing income, only in reverse. Put the expenses in the year of higher taxes, to reduce your net income in that year.
Before making any decisions that can affect your business tax return or spending money to save on taxes, consult your tax advisor or tax preparer.
The information in this article and on this site is intended as general information for discussion purposes. It is not intended to be tax or legal advice. Every business situation is different, tax laws are complex, and laws and regulations change.