Here are a few tips to help you work the system and raise your net profits.
Saving money by donating it to charity may seem somewhat counter-intuitive, but money isn’t the only thing that charities need. Not only does money or items that you give qualify for tax deductions, but so can employee time.
If you have a slow period where your employees are left with little to do, you may notice money being wasted as you continue to pay them despite there being no real work to be done. If you allow them to donate their time, on the clock, to helping with a charity event or provide service for the community, then that time paid is actually tax deductible.
The same money goes into salary expenses, but your tax expense has gone down and no work has been lost. A few possibilities for charitable projects include starting a food, toy or clothing donation drive, having employees teach coding basics to children, or running a mass yard sale and donating the resulting money and possessions to charity.
Rent for Business Activities
You may be surprised to learn that not having your own designated conference spaces for large gatherings will actually save you money. You not only save on property taxes by the reduced office space, but if you rent a space for less than 15 days per year for business purposes, the IRS won’t require you to report the related expenses as income. This saves you taxes in two areas, and also will give support to local renting businesses and open up the opportunity to have more exciting business gatherings.
Invest in the Oil Industry
Oil companies want you to invest in their projects, and so does the government. Government tax incentives have been put into place to give you a greater ROI on any oil or gas investment to domestic drilling projects. This is something that anyone, including small businesses and individuals can get in on, and oil project investment opportunities are plentiful across the United States. Not only will your income increase significantly from the investment returns, but the taxes on that income will be buffered by deductions and incentives, making that particular income source extremely profitable for your bottom line.
Use Independent Contractors
You may not need as many permanent staff members as you think that you need to help you run your company, and you can limit what you owe to the government by using independent contractors instead. You won’t be required to pay payroll taxes when you hire independent contractors.
other valuable resources:
Why hire permanent landscapers for your company property when you can easily have an independent contractor come and do maintenance without the taxes? Just be sure to file a 1099 form for any contractor who is paid more than $600 per year so that the IRS won’t tax you, and you’ll easily save in your payroll tax expense every year.
Reducing your business taxes is easy if you take the right approach. For any size of business, small or large, you’ll find a plethora of opportunities to cut back on tax expenses by shifting the workload here and there and investing in the right projects. By making smart decisions and maintaining awareness of your options, you’ll be able to cut your tax costs and save your bottom line.
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- Barbara Weltman
- Publisher: Wiley
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- Publisher: McGraw-Hill Education
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- Entrepreneur Press
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