Essential tax-savings tips for small business owners

1. Keep Organized:

   • Deduct every dollar spent on business expenses by staying organized.
   • Maintain a separate bank account for business activity.
   • Use bookkeeping software to track expenses and generate financial statements.

2. Make Estimated Tax Payments:

   • Small business owners must estimate and pay income tax quarterly.
   • Sole proprietors and partners should also estimate self-employment tax.
   • Staying on top of estimated payments is crucial.

3. Claim the 199A Qualified Business Income Deduction:

   • Take advantage of this deduction if eligible.
   • It allows certain business owners to deduct up to 20% of qualified business income.

4. Pay Wages to Your Children:

   • Employing your children can provide tax benefits.
   • Pay them reasonable wages for work performed in the business.

5. Claim the Self-employed Health Insurance Deduction:

   • If you’re self-employed, deduct health insurance premiums.
   • This can significantly reduce your taxable income.

6. Contribute to a Retirement Plan:

   • Set up a retirement plan (e.g., SEP IRA, Solo 401(k)) for tax advantages.
   • Contributions are tax-deductible and help secure your financial future.

7. Invest in a Business Building:

   • Consider purchasing a building for your business.
   • Depreciation and other tax benefits can lead to substantial savings.

Remember, consulting a tax professional is essential for personalized advice based on your specific situation. Implementing these strategies can help small businesses optimize their tax position and keep more money in their pockets.