Tax time is just around the corner, and with a month in since the start of 2017, many small businesses are working on getting their taxes in order. But if you are handling your taxes on your own, you might not know all the legitimate small business tax strategies. Many small business owners simply know the tax code basics, which results in them paying more to the government than they should. To help you stop overpaying Uncle Sam, try our legitimate small business tax strategies below.

Don’t Overpay Uncle Sam: 3 Legitimate Small Business Tax Strategies

Small Business Tax Strategies

Look into all Possible Deductions

For most small businesses, this is the biggest way you can bring down your payment to the US government. Most business owners are aware of the basic deductions: operating costs, transaction fees, and the like. But what about the lesser known deductions? Did you know you can deduct the following?

  • Accounting fees, including having someone help you prepare your taxes
  • Advertising costs, including advertising on social media
  • Banking fees
  • Building repairs and maintenance if done to a space you use for your business—yes, even if you run the business from your home
  • Business-related travel expenses
  • Discounts to customers
  • Housekeeping for spaces you use for your business
  • Moving costs for moving your business items
  • Rent of spaces used for your business
  • Utilities used for your business

Is there a catch? The only real catch is that you need to make sure you are only deducting the amount of money you use for your business. So, if we take housekeeping as an example, you need to figure out what percentage of your house is used by your business. If it is, say, 30%, then you can deduct 30% of what you pay your housekeeper.

If You Have Employees, Use Accountable Plans

An accountable plan is an IRS approved plan, allowing you to deduct expenses incurred by employees without reporting the reimbursements you make to your employees and employee income. This saves you when paying employment taxes. You can use this for a wide variety of expenses, including those for food, travel, and entertainment.

Look into Carryover

Some deductions and credits are designed to let you use them fully one year, but then not the next. However, there are others that allow carryover, so if you do not use them in full one year, you can carry them over to the next. Some possibilities are:

  • Capital losses
  • Charitable contribution deductions
  • General business credits
  • Home office deduction
  • Net operating losses

Do you have a strategy you use as a small business owner when doing your taxes? Share it with us!

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January 30, 2017

Don’t Overpay Uncle Sam: 3 Legitimate Small Business Tax Strategies

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