Are you looking to pay less taxes this year? If so, you're not alone. Every business owner wants to minimize their tax bill and keep more money in their pocket. Unfortunately, many business owners don't know how to go about doing this. They think that their tax bill is determined by the IRS and that there's nothing they can do to lower it. But this couldn't be further from the truth. There are a number of strategies you can use to lower your taxes. And, if you're not using them, you could be leaving thousands of dollars on the table.
If you are meeting with your tax professional only once per year, you're missing out on a valuable opportunity to lower your taxes. Not only that, tax time is probably stressful because you wait all year to find out your fate like the last 3 minutes of a reality show finale. It doesn't have to be that way. By strategizing and planning throughout the year, you can make sure you are taking advantage of all the deductions and credits available to you. And, when it comes time to file your taxes, you'll be in a much better position to minimize your tax bill.
So, when should you be meeting with them? The primary time to begin tax planning is in the fall, roughly between September and December. You want to have someone advising you year-round, however, so you can monitor how much you may owe in quarterly estimated taxes as a business owner.
Tax planning is all about finding opportunities to change the ending of the story for the year before the book goes to print. Think of it as filming an alternate end to a movie. You can work with a professional to identify a few strategies to help lower your tax bill or to help plan for the future.
So, what are some of these strategies? First, if you're in a high tax bracket, you may want to consider deferring income or investing in tax-advantaged accounts. You can also use tax-loss harvesting to offset capital gains and lower your tax bill.
Another strategy you can use is to take advantage of business deductions. There are a number of deductions that businesses can take, but many don't know about them or how to maximize them. For example, did you know that you can deduct the cost of business meals and travel? Or that you can deduct the cost of professional development and coaching if it's for business purposes? These are just a couple of the many deductions that businesses can take advantage of.
So, if you're looking to lower your taxes this year, don't wait until tax season to start planning. Start meeting with a tax professional now and begin strategizing how you can minimize your tax bill. By taking advantage of the strategies available to you, you can keep more money in your pocket and put yourself in a better financial position with no surprises next April. Not only will you be in a better financial position, but you can but your mind at ease knowing what outcome you will have and lower the stress at tax time.