Top Tips to Cut Your Small Business Tax Bill

Top Tips to Cut Your Small Business Tax Bill

Tax season is upon us, and many small businesses are scrambling, unsure if they will have to pay taxes or not and how much. For small business owners, this can be a trying time as having a huge tax bill can drastically affect your bottom line and may even impact the goods and services you are able to offer, as well as your business plans. This is where having a top-notch small business accounting team by your side is paramount.

Merriman Tax Services offers the best cloud accounting services, tax preparation, online payroll services, and more for your small business. Our mission is to partner with you by not only helping you with all of your small business accounting needs, but also helping you maximize your deductions and save when tax season rolls around. Below, we'll offer up some of our top tips to help you cut your tax bill. Contact us for small business payroll services today!

TOP TIPS TO HELP CUT YOUR SMALL BUSINESS TAX BILL

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Save for Retirement

Many small business owners have a very hard time saving for retirement. This is because either they think they may never retire, or they put it off so that they can invest all of their spare cash into their business in order to grow it. As most people know, time is on your side when you save for retirement, so the sooner you start, the more money you will have. There are many retirement plans specifically for business owners, such as a 403(b) plan, a simplified employee pension plan (SEP), an IRA or Roth IRA.

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Save for Healthcare Needs

You can definitely save on your tax bill for your small business by saving for future medical expenses. This can be done with a health savings account, or HSA. For these special types of healthcare accounts, your contributions are pre-tax, they grow tax-free, and, the best part, when you do make withdrawals, they are not taxed either. An HSA is one of the best tools available that not only can help reduce taxes, but helps you with saving money on medical expenses to boot. You can also use your health saving account to save money for retirement because there are no requirements to use up the money that sits in there. It can, in effect, grow for perpetuity, making a great way to pay for medical expenses well into retirement.

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Change the Structure of Your Business

Many small businesses start out as sole proprietorships or a partnership. However, if you set up an LLC, or a Limited Liability Company, you can reap significant tax benefits. If you are an S corporation, you pay yourself a salary and then the rest of the income from the business is not subject to FICA taxes. This can help you avoid paying taxes on a large portion of your income. Otherwise, you have to pay self-employment tax on all of the business's net earnings. In addition, a new tax code law implemented in 2018 now allows LLC business owners to deduct 20% of their business income on their individual income as well, with some exceptions. Here, your tax professional can advise you the details of these tax laws.

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Partner With a Professional Cloud-Based Accountant

Let's face it, most small business owners don't have the time to pour over the tax code and keep up with all of the frequent changes the IRA makes. Plus, unless you are an accountant, you'd probably fall asleep while reading it. Yet, having an intimate knowledge of the tax code is what will save your small business the most in terms of deductions, depreciation, and the like. It's imperative that you find a trusted small business accountant and tax preparation service that specializes in small business accounting in order to save as much money as you can. Merriman Tax Services can help you. We spend countless hours on your taxes so that you keep the most money in your pocket. Partner with us today!

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CHOOSE MERRIMAN TAX SERVICES

There's no doubt that tax season is a busy time for accountants. Our priority is ensuring your taxes are done correctly because, let's face it, no one wants to be audited. We work hard to answer all of your questions, to gain clarity if we have questions, and to ensure we have all of the documentation we need. Our cloud-based accounting firm utilizes technology in order to ensure your needs are met quickly and efficiently. We offer ready access to your financials, as well as a wealth of reports for you to gauge the health of your business. We want to be your partner in every way that we can.

If you are interested in our small business tax preparation, accounting, bookkeeping, payroll, or mobile notary services, reach out to us today!

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