As a business owner, you want to pay the least amount of taxes possible. Therefore, today we are discussing how to avoid paying more in business taxes than you have to.
Plan the Timing of Income and Business Expenses
If you are self-employed, you can control when you are paid and when you spend money. You can use the cash accounting method and claim income the year you get it even if you completed the work the prior year. Also, keep in mind that you can start stocking up on inventory and supplies at the end of the year for the upcoming year. Lastly, if you are expecting to be in a higher tax bracket in the next tax year you may want to consider saving all business purchases for the start of the New Year.
Make Charitable Contributions
When you are in a higher tax bracket, consider making large contributions to a charitable organization. Think about it, when you are in the 33% tax bracket you can save $33 in taxes off a $100 contribution. Keep in mind though, before donating to an organization you will want to make sure that they qualify under the IRS guidelines.
Just because you are a business owner, it does not mean that you automatically should expect to have to pay a ton in taxes. If you follow Huddleston Tax CPAs suggestions that we have provided to you today, you will find that your tax bill will be lower even when you are in the highest tax bracket. Call us at (425) 483-6600 or visit our Seattle CPA site.