Four Strategic Midyear Small Business Tax Tips

Small Business Tax Deductions Season

Small Business Tax Tips

Tax season is here, and while most people assume tax season only impacts employees, it is actually the case that tax season affects small businesses as well. The key to walking away from tax season more successfully is to approach tax season midyear as opposed to the end of the year. Here are just a few strategic midyear business tax tips that can help you both in the present and future years.

Increase Your Retirement Plan

If you be self-employed, make sure you save enough money with a qualified retirement plan. For example, it is possible for you to defer up to $20,000 of your salary to a 401 k plan. It’s much easier for one to increase contributions midyear vs. having to give up more money at the end.

Follow Your Dreams

Typically an activity you are passionate about can easily turn into your business. In order to take advantage of deductions, you have to prove that you’re engaging in an activity to generate a profit. Make sure your records can also help you fight the IRS just in case they try to challenge it.

Take More Trips

For the most part, you can deduct travel expenses which are business related. The key to being able to deduct these expenses is to make sure that you spend more days traveling for business than you do for leisure.

Celebrate Those Who Work For You

Deductions for business entertainment are limited to 50% of the total cost for such entertainment. Under a special tax law, you can write off 100% of the cost of an entertainment event, but only if the event takes place during a holiday.

What other ways have you saved money midyear on taxes? Leave your comments below and share them with us!

Image credit: zack Mccarthy

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