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If you spend time learning about tax tips for your small business, you can ease your tax burden for the coming tax season. There are many things that you could potentially do to help your tax burden. Here are a few small business tax tips that the professionals recommend.
1. Year End Help
At the end of the year, you should set up an appointment with your accountant or tax professional. You should have them review your books for the year and make sure that everything is up-to-date. They could be able to give you some last minute tips that you could implement to lower your tax burden before the new year takes effect. Even if you can lower the tax burden just a little, it is still money that you do not have to pay to the government.
2. Defer Payments
If you have a good relationship with your clients, you may want to ask them if they could potentially defer any payments until after the start of the new year. This will only work if your cash flow is still in good shape otherwise. However, if you do not necessarily need the money right away, you might as well see if you could put it off for a month. The less money that you receive in this particular year, the less money you will have to pay in taxes for the year. This may not always be an option, but if it is, it could potentially help your tax burden.
3. Make Purchases
If you have the money to do it, you may want to start making some purchases towards the end of the year. If you know that you are going to need some things in the first part of next year, you may as well go ahead and buy them now. You can increase your yearly expenses and lower your overall tax burden. The more that you can afford to buy now, the better off you will be when it is time to pay your taxes. You could buy extra supplies, pay your bills early, and buy equipment if you can. All of these things could make a difference for your business.
4. Fund the Retirement Plan
If your company has a retirement plan, you should also considering making matching contributions for your employees. Putting money into a retirement plan is a good way to offset profit. Every dollar that you put in a retirement plan will help reduce your taxable income. If you are going to have to give that money to the IRS anyway, you may as well let your employees have it. Before you do this, you will want to check with your plan's contribution limits. Each type of plan has a yearly limit that must be adhered to in order to qualify for the deduction. Look at your books for the year and determine how much a good contribution would be for your business and your employee's benefit.
