Small businesses continue to make up the life’s blood of economies everywhere, but the owners and operators of these businesses often work so hard and for such long hours that they have little time left over to think about ways to save money. After the recent passage of tax reform, too, entrepreneurs everywhere are re-examining their taxes to see how they can save further. Luckily for these business owners still struggling with taxes, there’s a relatively easy way to cut back on your operational cost; namely, by relying on some easy-to-master tax hacks that will put some extra cash in your pocket that can be invested to grow your business.
Take a look below, and you’ll soon master the 5 easiest ways to be taking better advantage of your tax code.
1. Keep your eye on the long-term
By setting long-term goals like retirement, you’re ensuring your own financial stability in the long run. Most business owners can go further, however, and begin putting additional money towards their retirement savings now, which can be taxed years or decades later when you finally retire.
Today, too many business owners aren’t taking their retirement seriously, and even fewer seem to understand that by putting more cash towards your retirement now, you can earn some serious tax benefits that will slowly accrue over time. Consider checking out an IRA tax guide if you’re having trouble saving for your retirement and using those savings to optimize your taxes, and you may soon find yourself dedicating a lot more time, money, and thought towards your eventual retirement.
2. Digitize your operations
Are you really a 21st-century business if you haven’t digitized your operations by now? Business owners everywhere are still shooting themselves in the foot by relying on old ways of doing things, and can save time, effort, and above all else money by relying on digital tax tools.
Of course, you should understand that a piece of software can’t always replace an invaluable human employee; for the best approach to your taxes, try to blend machine and man together, and leverage the greatest tools possible to combine the best of both worlds.
3. Don’t rush to meet a deadline
Tax deadlines aren’t something you can afford to miss, meaning your business shouldn’t wait until the last minute to ensure it’s compliant with all laws and has properly filed its returns. Nonetheless, today’s business owners are incredibly busy, and it’s understandable that you don’t have the time to keep up with every forthcoming deadline.
Luckily for you, you don’t have to; learn to rely on public tools made available by the IRS, and you’ll find it much easier than before to ensure you don’t end up missing a vitally important tax deadline. Keep up to date on the IRS’ calendar, and you’ll be better at ensuring you’re ready to pay your taxes on time.
4. Include your business’ equipment
If you’re not aware already, you can enjoy some serious savings by factoring in the cost of your business’ essential equipment into your taxes. Many of today’s aspiring small businesses spend tens or even hundreds of thousands of dollars in a few years’ time to modernize their equipment, often without realizing they can leverage those purchases into some tax savings.
In other words, if you’re a business owner whose company relies on many equipment purchases, you’ll want to be briefed on Section 179, which specifically lets you count all equipment purchased within a year to be considered as a business expense. Familiarize yourself with Form 4562, which will prove invaluable to you in the long-term, and you’ll soon be earning some cash back from the costly equipment purchases you regularly find your business making.
5. Don’t be afraid to turn to a professional
Small businesses are often a matter of pride, and for good reason; there’s no satisfaction greater than watching your commercial enterprise grow over time and morph into something that has a positive impact on your local economy. Sometimes, however, small business owners can’t go it alone, and need to rely on outside help.
If you’ve yet to consider turning to a tax professional, you need to seriously re-approach your views on how you’re doing business. Accountants will prove invaluable to you when it comes to detecting wasteful spending, and a certified CPA is often a must-have for small businesses trying to compete against bigger competitors. As you’ll come to see, finding a CPA who fits the spirit of your company and doesn’t force you to break the bank will be easier than you think.
What are you waiting for? Your business needs all the capital it can get – start moving now, and you’ll be saving mountains of cash on your taxes in no time.