4 Ways to Reduce Your Taxes for Your Small Business
As a small business owner, taxes can really cut into your profits. You could work with a tax service provider, such as a tax expert or accountant, to find legitimate ways to reduce your taxable liability.
Way #1: Open a Retirement Plan
Opening a retirement plan as a small business owner has man benefits. Opening a retirement plan as a small business owner allows you to help reduce your taxable income. If you have employees and contribute to their retirement plan, that can offer you further tax savings. Additionally, opening a retirement plan allows you to plan for your future, which is vital, as you never know where your small business will end. Retirement plans can offer significant tax savings, especially if you take full opportunity of everything you can contribute.
Way #2: Get into Healthcare
With healthcare, you will be able to take care of your healthcare needs. You will be able to go to the doctor without worrying too much about how you will pay for your treatment. Having access to healthcare can improve your employees and your mental and physical health and increase performance. You can offer health insurance plans and offer Health Savings Accounts as well. You can deduct the cost of providing health insurance. With a Health Savings Plan, the money will come out pre-tax and will be able to grow tax-free for use for medical expenses.
Way #3: Change Your Structure
Your business structure has a big impact on the taxes that you have to pay for your business. Therefore, you should sit down with a tax expert and figure out the best structure for our business from a tax perspective. Switching to a Limited Liability Company (LLC) can offer lots of tax savings for many small business owners. A tax expert can review the overall structure of your business and let you know if this option will work well for your business. In many cases, an LLC can help you reduce certain tax responsibilities.
Way #4: Consider Hiring Family
There are a reason so many small business employee family members. If you employ your spouse or your children in your business, you may be able to reduce or eliminate the taxes that you have to pay on their income. It, in many situations, can cost out you less money to employ your direct family members. This should be discussed with a tax expert to determine the exact tax implications for you.
If you want to reduce taxes for your small business, it is time to invest in yourself. Doing things like opening retirement accounts and providing healthcare for yourself and your employees can help to increase your quality of life and lower your taxable burden at the same time.