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As a small business owner, you’re probably always looking for ways to save money. One of the best ways to do this is by reducing your tax bill. Many tax deductions and credits are available to small businesses, and Edgewater CPA Group can help you navigate it all. So, let’s discuss five of the best ways to save on your small business taxes.
1. Claim the Home Office Deduction
One of the best ways to save on your small business taxes is to take advantage of the home office deduction. This tax break allows you to deduct some of your expenses related to your home office space, such as utilities, mortgage interest, and repairs. However, you can only deduct the portion of your home that’s dedicated for workspace and regular work-related activities.
2. Write off Business Expenses
If you’re self-employed or run a small business, one of the best ways to save on taxes is to write off business expenses. This includes everything from office supplies and travel costs to advertising and software subscription fees. Essentially, any expense directly related to running your business can be written off. This reduces your taxable income, and it can also help you save money come tax time.
3. Use the Self-Employment Tax Deduction
Many people are unaware that the self-employment tax deduction exists. This deduction allows self-employed individuals to deduct a portion of their self-employment taxes from their income taxes. The result is a lower tax bill and more money in your pocket. The deduction is especially beneficial for those in high tax brackets, as it can reduce your tax bill by thousands of dollars. To take advantage of the deduction, you must file your taxes using Form 1040 and include Schedule C (self-employment tax).
4. Take Advantage of Retirement Savings Plans
When trying to save on small business taxes, the best thing you can do is partake in a retirement savings account. These plans allow you to make tax-deductible contributions that reduce your taxable income. Other accounts defer taxes until you withdraw funds. In addition, many retirement accounts have other benefits, such as Roth options that let you withdraw your funds tax-free at any point in your life.
Hire a Knowledge CPA to Help with Small Business Taxes
The number one way to save on taxes is to hire a knowledgeable CPA. While many people think they can do their own taxes, the reality is that most people don’t have the time or knowledge to properly prepare their taxes. By hiring Edgewater CPA Group, you can be sure that your taxes are being done correctly and that you’re getting the maximum refund possible. If you own a business anywhere in Indiana, call us at (888) 317-4835. We can also help with bookkeeping, payroll, and tax resolutions.