Tax-saving ideas for your company

You can always draw on some strategies in order to reduce taxes. These tax-saving ideas for you company will help you keep some money left to run your company, as well as some personal reserves.

If your business is a sole proprietorship, an S corporation, or a partnership, you might be able to deduct 20% from your qualifying business according to the Qualified Business Income (QBI) deduction created by the Tax Cuts and Jobs Act (TCJA). This deduction is in addition to claiming your ordinary business expense deductions. You should qualify if your taxable income is below $157,500, or $315,000 if you're married and filing a joint return. 

Tax-saving ideas for your company

There are other scenarios where you can deduct some taxes. For example, by funding a retirement plan for yourself or for your employees, which has to be recognized by the IRS to allow deferment of taxes on earnings until the earnings are withdrawn. They include IRAs and defined contribution plans such as a 401(k) or 403(b).

Another option is to take tax credits for hiring new staff, going green, providing access to disabled employees and the public, and providing health coverage for employees. Most are part of the General Business Credit, so ask your tax advisor about these benefits.

If you’re thinking about buying equipment, you can leverage the depreciation deductions in conformity with Section 179. You might be allowed to deduct the costs of machinery, vehicles and hardware when you put the assets in service. Keep in mind that the deduction limit is $1 Million.

Take notice of this: you can even deduct costs of gifts that are destined to customers, vendors and employees, up to $25 per unit. The cost of entertainment, travel and meals can be lowered, as long as you can prove that they’re related to your business chores. 

You should consult a qualified tax professional to put into consideration these and other strategies that you can follow in order to save some money in taxes. Take into consideration that they’re going to represent you before the IRS in case you're ever audited, so it’s recommended to hire an enrolled agent.

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