Taxes are a liability upon any individual or business owner to pay to their government. While individuals must pay taxes once yearly, business corporations must pay throughout the year. Multinational companies are bound to pay taxes because of their vast spread of businesses. But small businesses can evade or reduce paying taxes by following certain strategies.

Every small business wants to save and invest money back into their business. To pay taxes would take away their hard-earned money. For that purpose, small businesses must hire tax planning services or consultants from known firms to understand their tax situations and how to reduce them.

The small-businesses can follow certain strategies to reduce their tax liabilities. The strategies are quite simple.

Strategies To Reduce Taxes

● Consult The Best CPA

One of the best ways to reduce your tax bill is to consult a Certified Public Accountant (CPA). A CPA is trained in tax law and can help you understand how taxes work and what steps you should take to reduce your taxes.

● Make A Retirement Plan

It would be in great interest for small business owners to make a retirement plan and contribute more towards the plan. This also helps reduce tax liabilities on small businesses. Self-employed business owners have the advantage of a Self-Employed Person Individual Retirement Account or SEP IRA. With this, the owner can save up to 25% of their income in their retirement account, thus helping them save more for their business.

● Family Owned Business

It would benefit the small businesses to keep their business within the family. This entails hiring family members as employees. This shelters the income paid to your children or spouse from being inspected for taxes.

● Business Expenses Reduce Taxes

All expenses paid in the name of the business help reduce taxes. These may include rent for the business space, utilities bought for the business, and any such expense spent for the business. If all the expenses are filed properly, it can help reduce taxes on the business.

● Small Business Structure

Owners of small businesses must understand the need and benefits of structuring their companies as Limited Liability Companies (LLCs). This has many tax benefits. The taxes are taxed at the personal income tax rate, and the owner can save on Social Security and Medicare taxes.

● Vehicle Expense

Vehicles used for the business can be written off as a business expense, thus, reducing the tax implemented on the buying of the vehicle.

Profitable Small Business

When starting a business, every penny spent in the business counts. The owner knows the hard work with which he has made the money and is now utilizing it to start their business. Following the above mentioned strategies will help reduce taxes on such small businesses resulting in more profits for the owner. That's why finding a tax consultant who can help you navigate the tax code is so important.

We at Nidhi Jain CPA understand these needs and are here to help. We can offer you; Tax planning, Tax preparation, and Tax representation services. Small businesses must hire personal tax accountants. They will help them understand the ins and outs of taxes. Using the best tax resolution and planning services will help make the business more profitable. Get in touch with us today to make your tax season stress free.