It’s tax time, and the number one thing on everyone’s mind as they are filing their taxes is how to pay less in taxes. This is a topic that should be on a business leader’s agenda all year long. That’s because there is not much you can do after December 31 to reduce your taxes, but there is a lot you can do before then.
But we’re already past December 31, and the main thing you can do now to reduce your taxes is ensure you are taking as many deductions as you are eligible to take and that you are maximizing the amount of those deductions. You can reclassify some deductions after the end of the year, but you have to do it carefully and accurately as any big change in the amount you owe compared to previous years can draw an audit. That’s not a bad thing if you have accurately accounted for these deductions.
I cannot know what your allowable deductions are without looking at your accounts and accounting, but I can tell you some of the things I always look for, and I’m providing links to IRS tax forms that are highlighted to show you the line items you can look at. Both Schedule C and Form 1120-S, with the highlighted lines, are linked below.
Here are a few of the typically overlooked or underdeclared deduction strategies that are available to each type of business, self-employed (LLC or Sole Proprietorship) and S-Corporation. Note that all of these things must occur in the tax year for which you are claiming the deduction – which is why I keep saying it’s so important to plan your taxes. Some of these also have restrictions and limitations imposed.
|Cut Payroll Taxes||X|
|Health Insurance for Employees||X||X|
|Hire your spouse||X||X|
|Hire your child||X||X|
|Home Office expenses||X||X|
|Cell Phone Expenses||X||X|
|Download the Annotated Tax Forms||1120-S||1040-SC|
Do you have expenses that might be deductible from last year? Did you miss these in previous years? Want us to take a look? Schedule a Business and Tax Review meeting with us, and we’ll even review last year’s filing. But do it soon. The tax deadline is coming up quickly and the schedule is booking quickly. Here’s the link to schedule yours: https://calendly.com/ethan-hundleyadv/60min