How Small Business Owners can Save on Taxes in 2018


It is important for small business owners to understand the taxation structure. Most of the startups find the process of taxes on small businesses very confusing. There are different kinds of questions for all small startup owners ranging from finding the taxable amount, ways to pay taxes, ways to reduce taxable income to knowing about tax benefits and rebates. In addition to that, in order to grow their business, owners should always look for tax-free options to save money on taxes. In our previous post we already discuss about the finance tips for business owner to succeed financially. 

How Small Business Owners can Save on Taxes in 2018

What are the tax benefits for startup owners to know about? What are the business tax saving hacks that all small entrepreneurs must be aware about? Read about the best ideas that you take for your own business to have money on taxation costs for your firm.

Do tax Planning

It is very important for small business owners to do proper tax planning in order to reduce tax burden on small businesses. In addition, year end planning is must for startups to check their business growth.

  • Remember that tax planning is year-round activity
  • Must take help from business accountants
  • It helps to reduce tax burden
  • Tax planning at year end is a must
  • You must also know your tax benefits

Tax benefit Plans

There are different kinds of tax benefits and rebates that are available to small business owners and startups in order to grow their business plans and think less of cash constraints in the initial years.

  • Always look for different tax benefit options
  • Must calculate employment tax costs
  • Know about benefit plans for employees
  • You should also calculate transportation costs
  • Find ways to reduce extra taxation costs
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Consult Business Accountants

It is always recommended for small business owners or founders of startup firms to take professional help in order to lower the high taxation burden for small businesses. In addition, it is also vital to trust your accountant.

  • You must always consult your business accountants
  • It is important to have trust in your tax accountant
  • Do always talk about tax benefits options
  • Also do keep track of your business tax deductions personally
  • You need to keep a check on work of tax consultants

Modify Business Structure

The taxation policy on small businesses depends largely on the kind of business structure that the firm operates on. However, it is also sometimes necessary for small business owners to change their business structure to enjoy more tax benefits on the business.

  • Do know best business structure for less taxation
  • It is important to do business as an LLC (Limited Liability Company)
  • You can pay less Federal Insurance Contributions Act (FICA) taxes
  • Need to understand complexities on tax deductions
  • You should also decide to have sole proprietorship or partnership

Understand Business Insurance

One of the vital mistakes that most small business owners make is of overlooking the aspects of business insurance and also understand the steps of claiming disaster losses. This step also helps to decrease tax amount for small businesses.

  • Small business owners should take business insurance
  • Try to know steps for claiming disaster losses
  • Do keep track on standard mileage rates for business
  • Know benefits of taking IRS (Internal revenue Service) mileage allowance
  • Take a look at business coverage also

Count Capital Assets

One of the important tasks that small business owners should do is to calculate the capital property in order to access the growth of business. In addition to that, it is always vital to keep track on the capital property expenses and the profit margin that is generated by the small businesses.

  • Business owners should count capital assets
  • You should also collect intangible property
  • Do calculate the annual depreciation costs of business
  • Also make capital cost allowance (CCA) claims
  • Try to increase capital property of businesses

Calculate Management Costs

In addition to counting capital property, every small business owner should know the costs for managerial expenses in any firm is always very high. All the startups should consider the ways to keep track on the increase of management costs in the firm in order to get some tax benefits.

  • All small business owners must always calculate management costs
  • Mostly, managerial costs are quite high
  • Do keep track on managerial expenses of small businesses
  • Try to decrease business management costs as much as possible
  • Know right parameters for correct calculation of management costs

Check Employee Benefits

The vital part of any business organization comprises of employees. It is important to correctly evaluate and compensate employees in order to ensure growth in any firm. Business owners show know about the different kinds of employee benefits and salary options.

  • Employees are vital part of any business
  • Various employee benefits are available
  • Know about employee insurance premium options
  • Take a look at employee remuneration charges
  • Small business owners can claim deductions by just hiring family members

Review Retirement Options

All the small business owners should take benefit of retirement plans in order to maximize their tax saving options. Moreover, retirement savings funds are an important option for getting more tax benefits in to have more capital and increase business infrastructure.

  • Know tips to modify retirement options
  • Most retirement plans have tax benefits
  • There are many retirement plan choices
  • Find the right retirement options for employees
  • Should also think about debt reduction

Assess Car Expenses

The business owners must think about employee transportation costs along with car rental options. In addition to that, the expenses on terms of car fleets and fuel charges should be calculated in order to check any chances of tax benefits.

  • Know expenses on car fleets
  • Keep track on transportation costs
  • This falls under employee travel expenses
  • Small businesses include public transportation costs into travel expenses
  • Employees can ask for fifty percent claims

Things to Remember:

It is very important for you to follow the given steps in order to save taxes. In addition, it should also be remembered that saving on taxation amount also helps you to save more money. Moreover, it is very vital for small business owners to generate more capital on infrastructure and workforce and save maximum amounts on taxes through various kinds of tax benefits and rebates options. You will also take into account the new rules that are implemented on business and personal tax deductions and think of lowering taxes for startups.

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