Never too early: Top tax tips for your business
In April, you filed taxes. Was it a smooth and seamless process? Or was it a last-minute race to beat the deadline – and you’re still not sure you got it right?
Don’t wait to find ways to lower your taxes. Here are some strategies you can put into place immediately:
Contribute to your retirement account. Make deductible contributions each payday to your retirement account. You want to contribute the maximum allowed by law, but even small contributions will grow steadily.
Organize your records. The key to saving money every year is good recordkeeping. Set up individual files, like hardware/software purchases, professional fees and services and office supplies. Put receipts – along with any necessary comments or notes – in the files as you go. Be sure you have a copy of last year’s return on hand, as well as any W2s and 1099s you’ll need. Consider financial software programs, such as Quicken or TurboTax, to stay organized.
Itemize those deductions. It’s more work to itemize than to take standard deductions, but the payoffs are usually worth it if you have qualified expenses. Consider business car expenses, professional dues, medical expenses and more.
Know what you can deduct. If you’ve just started your business, most – if not all – of your start-up costs can probably be deducted. Big purchases, like computers, furniture and machinery, are generally eligible. So are advertising, professional fees and travel costs. Debt, like interest you pay on business credit cards or business loans – as well as certain service fees and late charges – can often be deducted. Are you entertaining clients or potential investors? Save those receipts!
Invest in your business. Looking to lower your tax bill? Put your money back into your business. Upgrade your computer or phone system. Purchase additional equipment or machinery. Buy a company car. Employee bonuses are also deductible in some cases. Not only can investing in your business save money on taxes, but it can also save energy, improve your company’s efficiency and earn new customers.