The hardest thing to understand in this world is ‘income tax.’ Every small business owner tries various ways to minimize the tax legitimately.
Unfortunately, nine out of ten small business owners pay more tax than they are obliged to. So, it is advisable that they should seek the advice of tax agents to minimize it.
Here is the list of some of the advice given by a tax agent to business owners:
Use Accountable Plans
If being a business owner, you reimburse your employees’ travel, tools, entertainment or other costs, then you need to practice an accountable plan that meets IRS requirements. With such a plan, you can deduct some of the business expenses.
Don’t Overlook Carryovers
Certain deductions and credits have restrictions that can prevent a small business owner from using them fully in the current financial year, but could permit a carryover in the next year. Keep a track of the carryovers so that you don’t forget to use it in the next or coming years.
Few examples in this respect are listed below:
- General business credits
- Capital losses
- Net operating losses
- Charitable donations
- Abandon your Business Property Rather than Selling It
There are various benefits of abandoning your business property rather than selling it at a nominal amount. Your business will undertake only an ordinary loss on the property, which is fully deductible. It can also save you from the capital loss which may be subjected to many limitations in the future.
Use Fringe Benefit Plans for Employees
Supplementary wages generate employment tax costs for the business, but if the business owner pays for certain fringe benefits to employees, tax related to these can be avoided.
A Tax Agent in Glen Waverley helps a business owner to possess the following tax benefits in this regard:
- Health benefits
- Educational assistance
- Group life term insurance
- Transportation benefits
- Meals provided for convenience of employees
- Shelter Profits in Retirement Plans
A business owner can easily setup a retirement plan for its employees. Due to this, the owner is not required to pay tax currently on his/her contribution provided towards retirement plans.
Do Year-End Planning
While tax planning is a year-round activity, a small business owner can achieve dramatic savings by taking actions at the end of the year. For instance, if a small business is on cash basis for accounting purposes, he/she can delay the billing work for the current financial year so that the payment will be received the following year. This effectively lowers the business profits as tax is deferred on the cash, which the owner could collect for one year.
A tax agent can reduce the amount of taxes that a business owner pays. So, seek the advice of tax agents to reduce your tax burden.
If you are looking for Tax Agents in Glen Waverley, then you can definitely count on Opulent Accountants. They render high quality accounting as well as tax services to different businesses and individual entrepreneurs.