The Best Small Business Tax Tips And Deductions - 1486 Words

The Best Small Business Tax Tips and Deductions The Best Small Business Tax Tips and Deductions Small-to-medium-sized businesses can target a wealth of business opportunities in today s global markets, but many business owners and entrepreneurs fail to consider one of the greatest sources of real-world income available to them. Developing a proactive tax strategy and taking advantage of all your business deductions generate incredible profits that businesses or owners can use for any purpose. Unlike the proceeds of gross sales and even gross profits, the money that your business saves on taxes is the purest form of profit. Other income isn t necessarily available for spending or investing until the taxes are paid. Clever business owners†¦show more content†¦Taking Home Office Deduction The home office deduction is available to many SMB owners who work out of their homes exclusively or routinely meet clients and work at home. You can deduct a percentage of your home that s used exclusively for business and the same percentage of most of your household expenses like repairs, utilities, routine maintenance, insurance, mortgage interest, property taxes, rent, office supplies and many other costs. You can deduct actual expenses or take the recently approved standard deduction for home offices. Hiring Family Members Hiring family members is one of the most effective ways for business owners to reduce taxes and keep more of their wealth in the family. Employees can qualify for tax-free benefits, and your children can earn up to $6,200 tax-free. This money can be placed in a Roth IRA, which can be used to buy a home or pay for college. Children also qualify for lower tax rates on the income that they earn. Most business owners have real jobs around the office that family members can do; it s just a matter of matching the right child with the right job. Contributions to HSAs, providing health insurance and other employee benefits also keep your business income in the family without paying taxes. Reporting Actual vehicle Expenses The standard mileage rate has its appeal, but you could be