We’re back with a few more tax saving strategies to keep you and your small business healthy and wealthy!
Deduct business losses
If you have any capital gains on investments, you can subtract any losses you’ve incurred to minimize any taxes owed on your gains. If you have no gains, you can still take losses against your income up to $3,000.
To make sure you do this correctly, you must define gains and losses clearly. For example, if an investment returns original principal to you, this is not a gain. REITs (real estate investment trusts) give out dividends which include principal as well as utility stocks.
Gift assets to your kids
Especially if your estate is just over the threshold that you now need to pay estate taxes, you (as well as your spouse) can reduce the value by gifting up to $13,000 per year each, to each of your kids, grandkids, or anyone else without paying gift taxes. For families that are very financially well off, this is a great strategy for paying for education and passing on your legacy while minimizing the tax burden.
Another strategy related to your kids includes the child-care tax credit that can be used to write off summer day camp or day care costs (under the age of 13). This counts for a credit up to $3,000 per year for one child, and up to $4,800 for two or more dependents.
Pick a knowledgeable and aggressive tax preparer
As the tax law becomes more and more complex, with laws changing on a monthly basis, nearly 65% of taxpayers are already utilizing a tax preparer. Unfortunately it’s difficult to find a good one – someone who is aggressive – knows the laws and will do everything in their legal power to save you as much money as possible. This type of person should be creative and work with you to build a tax saving strategy that works for your unique situation.
As a business owner, your time is limited with all the various other tasks necessary for running your growing empire. If you’d like help with your payroll management, our accounting professionals offer payroll services as well as business accounting services, and will be very happy to assist!