There are many ways to save money and many ways to make money, but there’s one thing that all businesses have in common: taxes. Whether you’re a small business owner or an employee of a larger company, the IRS is always looking out for its cut—and it’s not the only cost of doing business. Whether you have employees or not, your expenses can add up quickly depending on what kind of business you’re running. Fortunately, there are some easy-to-implement tax strategies that can help keep things under control when it comes to both employee payroll taxes as well as deductions for capital equipment purchases and other costs associated with running your own business.
Don’t Pay Too Much on Your Mortgage Interest
Mortgage interest is tax deductible, but the mortgage interest deduction is capped at $750,000. The deduction is phased out for high earners and not available for second homes. If you’re planning on buying a home in 2019 and have plans to sell it within 10 years (or if you’re looking at buying an investment property), now’s the time to get those numbers in order so that you don’t pay too much on your mortgage interest after taxes are applied!
Decrease your CPA’s Billing Rate
Negotiating with your CPA is the best way to get the price down.
- Find a cheaper CPA: If you have several years of experience running a business, then you should be able to find another CPA who charges less than your current one.
- Find more efficient service: There are plenty of CPAs out there who can provide similar services but charge less because they operate differently and use different technology (for example, cloud computing). If this sounds like something that might interest you then take some time researching new ideas before choosing one over another!
Reclassifying Your Employees as Contractors
One of the most common ways to save money on taxes is by reclassifying your employees as contractors. This is a great option if you have high-earning employees who would be taxed at a higher rate if they were considered employees.
To do this, you must meet certain criteria:
- The worker must be paid on 1099 forms, not W2s (which means that they are self-employed).
- They must perform services outside of normal business hours and/or at their own home or office rather than yours. For example, if an employee works 8 hours per day Monday through Friday in your office space, but then spends another 4 hours working remotely from home and gets paid for both sets of hours combined–that’s likely going to qualify them as an independent contractor for tax purposes (and therefore save you some money).
Maximize the Deduction for Charitable Contributions
- Donate to charities before the end of the year.
- Donate to charities that are tax-exempt.
- Donate to charities that are tax-deductible.
- Donate to charities that are tax-free.
Complete Section 179 Expense Deductions for Capital Equipment Purchases.
If you have purchased any capital equipment or software, you may be eligible for Section 179 expense deductions. This is a tax code that allows businesses to deduct the full purchase price of qualifying equipment and software in the year you buy it. It’s a great way to deduct your purchases, but there are some limitations:
- You can only claim up to $2 million worth of expenses per year (this amount increased from $500,000). If you go over this limit, then your deduction will be limited based on how much money remains after subtracting other types of deductions from your total gross receipts from operations before taking into account depreciation or amortization–you’ll get another chance at claiming this deduction next year!
- You must have been in business for at least three months before making any purchases under Section 179 expensing; otherwise their use would not qualify as “new” property under IRS regulations because they were bought prior
to becoming an active business owner.”
Promote Your Company in Social Media
Social media is an excellent way to promote your company and get customers interested in what you have to offer. It’s also relatively inexpensive, as it doesn’t cost you anything more than time, which is something that every small business owner has in abundance!
To start promoting yourself on social media:
- Create a Facebook page for your business and make sure it has a profile picture and cover photo (and maybe even some posts). The more people who see these things when they visit Facebook, the better chance you have of them clicking through to find out more about what you do.
- Create Twitter accounts for each location where employees are based or services are offered (if applicable). Again, include photos so people can recognize them when tweeting back-and-forth with one another across different locations/employees/etcetera!
You can save money by deducting your costs as deductions.
Deductions can be used to reduce your taxable income and reduce your tax bill. If you’re a small business owner, you should be aware of the most common deductions:
- Expenses related to running your business are deductible. This includes things like accounting fees, office supplies and equipment purchases (including computers), employee salaries/wages, etc.
- You may also be able to claim certain investments for tax purposes as well–for example, if you buy a piece of machinery that increases productivity in order to bring in more revenue over time (and therefore increase profits), then this purchase can potentially be deducted from earnings before calculating taxes paid on those profits later on down the line!
The key to saving money is knowing how to take advantage of deductions. By keeping these tips in mind, you can reduce your tax liability and keep more of what you earn.
