Tax season is coming up quickly. Sure, it’s not until next year, but that doesn’t mean that you shouldn’t be preparing for it. In fact, it’s something you should be taking steps to prepare for all year long, especially if you want to reduce your tax liability. While taxes may not be your professional specialty, there are still some things you can do to take matters into your own hands.
Deduct Qualified Expenses
If you didn’t already know that there are qualified expenses you can deduct from your taxes to reduce your tax liability, that’s something you’re going to want to read up on ASAP. Even if that’s something you were already aware of, it never hurts to refresh yourself on what counts as a qualified expense. When you deduct these from your taxable income, you’ll be reducing the amount of income the government can tax, resulting in lower tax liability for you.
Put Money into Retirement Plans
Retirement plans don’t just benefit your employees, they can also benefit you. You can sometimes deduct the expenses related to offering retirement accounts. You may be eligible for tax credits too. Keep in mind that not all retirement plan options are created equal. A cash balance plan lets you save way more than a 401(k) plan does. Take a look at different options to see which one makes the most sense for both your business and employees.
Stay Up to Date on Tax Laws
Tax laws change on a relatively frequent basis, which means you may need to make some adjustments to how you reduce your tax liability. That takes a lot of time and effort though, something you may not be able to afford. As a business owner, you have a lot going on and a lot of responsibility already. It may be better to look into hiring a tax professional who specializes in business taxes to handle them, rather than trying to do them yourself. It’s literally in their job description to stay up to date on the latest changes made to tax laws, which means that they should be uniquely equipped to help you reduce your tax liability.
Tax season doesn’t officially start until the beginning of next year, but with the end of the year fast approaching, it’s a good idea to start looking ahead to it. Being prepared and informed are two of the best things you can do to reduce your tax liability. That way you’ll be able to take steps to reduce your taxes and save more of your business’s hard-earned money.
There are many surprising ways that money can find its way out of your pocket when running a business: learn more about Expenses That Can Drag Down Your Business if You Aren’t Careful.