When you own and run a small business, minimizing taxes may mean the difference between surviving and folding. No one likes paying or dealing with taxes, nor do they want to go through the process of settling old taxes. (That’s why we at Tax Relief, Inc. work with you.) To help those who want to stay on top of their taxes, here are five tax-saving tips for small businesses. 

1. Pay Yourself First

Putting away for retirement is critical for all of us. Luckily, for small business owners and the self-employed, many retirement planning options are available. This includes traditional IRAs, Roth IRAs, SEP IRAs, 401(K)s, and more. Annual contribution limits for each range from around $5,500 to $55,000 or more. Any of these plans will lower your tax bill by deferring taxes on the contribution amounts until after retirement. Work with your tax advisor on the plan(s) and the amount that works within your cash flow needs.

2. Use Receipt / Spending Trackers to Maximize Deductions

We’ve all experienced that shoebox teeming with hundreds if not thousands of paper receipts that need to be gone through at the beginning of tax season. Besides being a painful organizational task, chances are some receipts got lost or misplaced. This literally means tax return money right out of your pocket. We highly recommend using apps or software like SmartReceipts, Quicken Self-Employed, or Expensify, and inputting expenses as you go throughout the year. In addition, be sure to link your business credit cards and bank accounts to the software. This will allow you easily to produce a spending report at tax time with just a few clicks. 

3. Deduct Home Office & Auto Expenses

Despite being eligible, many business owners simply do not take advantage of the home office deduction for fear of undue scrutiny of their tax returns. However, if you keep good records and qualify, there’s no reason not to. And, the amount you can save can be surprising. If you work from home, check with your tax advisor about whether you qualify to take the home office deduction. 

Likewise, many small business owners forget that they can deduct auto expenses when it is used for business purposes. Depending on how much you use your car for business, this could result in thousands of dollars in deductions, well worth the effort of tracking your usage, including mileage.

4. Expense Big Ticket Assets

In December 2017, the Tax Cuts and Jobs Act (TCJA) became law. It allows for 100% bonus depreciation for many big-ticket assets through 2022. In other words, small businesses are able to write off the entire amount of an asset during the year in which it was put into the business. Reach out to your tax advisor to learn more about which assets the TCJA covers. 

5. Use Tax Software

If you own a small business, tax software like TurboTax, H&R Block, or TaxSlayer is simply a must! It makes preparing and filing taxes online more accurate and much easier. Most of them also come with maximum-refund guarantees, meaning they prompt the right questions so that you don’t miss critical deductions (including carryover deductions for things like capital losses, net operating losses, or large charitable donations). Finally, some of them also not only guarantee the accuracy of the return but also reimbursement of associated fees or penalties. 

For those who are looking to get back on track and keep growing their business, trust in Tax Relief, Inc. to help. We’ve developed a track record of helping small businesses deal with old taxes for over nearly three decades, saving our clients time and money. If you're looking for expert support with your taxes, contact Tax Relief, Inc. at 630-655-1040 or visit our website to find out what we can do for you.