Tax time can be a confusing time for anyone, but small business owners may be especially confused. It’s important to properly pay your taxes to ensure you don’t pay too much or too little.
Small business owners are more likely to be asked to document returns than anyone else, so you need to be sure you are aware of LLC and S corp tax saving strategies.
If you want to ensure you pay the correct amount to Uncle Sam, check out these five small business tax tips so you can pay what you owe and nothing more.
1) Use a Tax Filing Software
When it comes to small business tax strategies, you should start with using a tax filing software. This helps you stay on track throughout the year and can help get you prepared to file your online tax return. Using a software will help you ensure accuracy of any fees and penalties.
2) Keep Business and Personal Separate
As a small business owner, you need to be sure that you are keeping business and personal finances separate. You need a separate business checking account and credit card so you can ensure that you are confusing anything with your personal assets. This will make tax time much easier.
3) Know What You Can Deduct
There are several small business tax deduction secrets you need to know about. A few things you may be able to deduct at tax time are:
- home office
- car expenses
- business meals
- travel expenses
- business supplies
- charitable donations
It’s important to know how to reduce business taxes my knowing what deductions you can use. You need to be sure that you aren’t taking advantage of this, but this can be a great way to save money. Be sure to keep all of your receipts so that you can prove your deductions.
4) File Taxes on Time
Another way to make sure you don’t pay more on taxes then you should is to file your taxes on time. You will be penalized if you file late. Even if you can’t afford to pay what you owe, file anyway so you can afford the late fee.
5) Set up a Retirement Account
Set up your retirement fund now. Your taxable income can be reduced if you are putting some of your income towards a traditional or Roth IRA.
If you set up a retirement plan for your employees, the contributions that you make as the employer are tax deductible and those assets will grow tax free.
Want More Small Business Tax Tips?
Whether you are an LLC or an S corp, you need to know all the ins and outs of filing taxes. These tax saving tips can save you both time and money.
If you are looking for more small business tax tips, be sure to check out our business blog for great tips and strategies.