There is a big difference between being a business owner and being a smart business owner. The latter has a much better chance of success if they follow a few simple tax strategies. It may be confusing, but the decisions you make now regarding your business taxes could mean the difference between an exciting, bright future filled with growth, or a much darker future riddled with regret and failure.
Keep Those Receipts
Receipts create a snapshot of your financial year, a tangible record of how you spent your money. All these receipts you’ve been keeping may also represent a taxable income offset: possible tax deductions for goods and services. Not only do receipts prove your expenses, but they can also be used as proof for any and all expense deductions owed to you.
Be Smart About Tax Elections
By being smart about your expenditures early on, your business will have a chance to thrive without needing to starve. Up front, if you need office equipment or manufacturing machinery, or even 3D printers for rapid prototyping your product samples to show investors, as part of a new tax law, you can deduct the cost of purchasing all these items up to $1 million as of 2018.
Use an Expert
Okay, so you don’t have much financial wiggle room right now. Your small business is turning a minimal profit, but you live in a bubble of stress and worry. Lessen your stress by skipping the tax software and hiring a CPA. An expert familiar with tax law changes will help you figure out how to pay the IRS the lowest amount and assist you with guidance so your business strategies are informed and your small business gets to see another year.
Work With the IRS in Lean Times
Despite your best efforts, your business has been facing an uphill battle. Your profit margin evaporated and things haven’t worked out well financially. All of a sudden, tax time came and sadly, you struggled to pay. Don’t get panicked — get smart. The IRS wants to work with you in paying your taxes. Don’t forget small business are the backbone of the U.S. economy, so they very much want you to succeed.
How do you get tax relief? The IRS Fresh Start Tax Relief Program. It can assist you with tax relief options and can help you get back in good standing with the Internal Revenue Service. The program offers many tax relief options to you and your small business, making repayment and backlog tax deduction simpler and less stressful.
Your business isn’t just a pet project — it’s your dream, your baby. Treat it like you would your child. Nurture it, guide it well, and help it grow. No one plans to fail, but it is estimated around 20% of small businesses fail in the first year, while nearly 50 percent fail by year five. Don’t be THAT business. Be smart, and your small business will get to celebrate year six.