3 Factors in Reducing Your Small Business Income Tax

Paying small business income tax is something that many business owners do not understand and is thus a source of anxiety. However, it is a necessary part of doing business. Here are a few factors that you should consider that can reduce your small business income taxes.

1. Revenue

One of the biggest factors that you need to consider is how much money you are bringing in. If you can find ways to adjust this at all, you should utilize them. For example, at the end of the year, if you can delay a payment from a debtor until the next month, it could be to your advantage. 

2. Expenses

Another important category that you should consider is your amount of expenses. Anything that you can do to increase your business expenses will help you lower your tax liability. If you get towards the end of the year and you have plenty of cash flow, you should consider purchasing necessary supplies. Or, you can also consider paying some bills early for next year. Increase your expenses as much as possible along the way.

3. Donations

When you make a charitable donation to a qualified organization you can also use this as a deduction. Most of the time, this will pass through to the owner of the company, but it still helps lower your overall tax burden. 

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