Five Tax Tips for Small Businesses

Nobody likes to pay taxes, especially not more than they have to. As a small business owner, you’re acutely aware of how taxes can eat into your profitability. And making mistakes can cost you even more. That’s why it’s important to take advantage of everything you can to help keep your tax costs down. Here are five tips that can help.

  1. Call the professionals

    Unless you have a background in accounting, it’s probably in your best interest to hire an accountant or bookkeeper to help manage your business taxes. A good accountant can not only help you calculate and pay your taxes, they can also help you strategize for ways to save. It’s likely that a good accountant will save you money.
  2. Make a plan

    Having a tax strategy in place can help you pay the right amount of taxes at the right time. You’ll likely need to make quarterly payments throughout the year. Know when they are due and how much you will need to pay to avoid penalties. You’ll need to set aside earnings regularly to meet these quarterly tax obligations.
  3. Track your spending

    The IRS still wants you to show them the receipts. So make sure you keep track of all business related expenses with a paper trail. A budget software program can be a great asset in helping you track your expenses throughout the year.
  4. Know what you can deduct

    Keep track of anything you use or do for your business. You can take deductions for mileage, meals with clients, equipment and supplies, and rent, among many other things.

    This is where a good accountant can help, as they will likely know the ins and outs of small or home-based business and what deductions are available. This is especially important in home-based businesses where the lines between personal and business expenses may become blurred.
  5. Take advantage of credits

    There are many tax credits available for a variety of reasons, and your business may benefit. Credits are often given for services you do for the betterment of others. You may qualify if you provide childcare, employ veterans or persons from protected classes, or if you invest in environmentally friendly practices. The IRS website provides a list of available tax credits, and your accountant should also be able to help. 

Sea-Mountain Insurance is happy to answer questions about your business insurance needs. Give us a call today.