TAX PLANNING TIPS FOR SMALL BUSINESS OWNERS
- Do Your Research—or Hire an Expert. Taxes are a serious matter, with penalties and fines for not doing them right. If you don’t have hired help already, seriously consider it. Even though your business may be small, a knowledgeable tax attorney can be your biggest advantage.
- Don’t Ignore Deductions. There are hundreds of them out there—many you may not even know exist. When you utilize the magic of deductions, you can subtract business expenses from gross income. Many small business owners take advantage of automobile deductions, home office deductions, and travel expenses.
- Classify Correctly. Placing your business in the right category can reduce your tax rate significantly. Visit with a professional business-planning lawyer, or educate yourself on the different classifications that exist. Some include Sole Proprietorships, Partnership, S-Corp, and Limited Liability Corp.
- Stay in Control of Your Due Date. If you want an extension on your taxes and it isn’t granted, consider other ways to delay your date, such as postponing some actions and speeding up others. Again, consult a tax attorney for the best advice pertaining to your personal business situation.
- Make Negotiations that Work for You. If you can’t quite make your quarterly tax payments, try negotiating a monthly payment with the IRS. This will allow you to pay in smaller increments more frequently. Payment plans are based on eligibility, so look into them, but be wary of interest that may accrue.
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