When we first start our business, it's hard to imagine someday that we will be searching for ways to increase our expenses. Yet inevitably, for those that succeed at the entrepreneur game, it's normally the case. We work hard and want to do the right thing, but also want to take advantage of every deduction that's available to us. The following tax reducing strategies are something for every entrepreneur to consider:
1. Offering benefits to your employees and yourself! Health insurance, Paid Time Off, wellness plans, dental insurance, tuition reimbursement programs, child care and more. If you can afford it, now may be the time to check out some of these employee benefit programs
2. B.Y.O.D. or "Bring Your Own Device" programs reimburse staff for the use of their personal cell phones. It's not taxable to the employee and a deduction for the employer.
3. Retirement Plans....think 401k, Sep-Ira or even for those that are in the right position, a traditional defined benefit plan may do the trick. Careful planning here will go a long way, so consult your CPA and your financial advisor.
4. Travel and automobile. We all travel for business and use our automobiles for work. Make sure you're documenting the use of these items to take advantage of the best tax breaks you can. Buying vs. Leasing a car can be a big difference when you are considering a large SUV vs. a regular sedan. Where is this year's shareholder meeting going to take place? These are things to be discussed with your CPA.
5. Reviewing your meals and entertainment expenses is another way to help lower your taxes. Was that really a meal when you brought in bagels and coffee for a meeting, that's now only allowed a 50% deduction, or was that a meeting and seminar expense that's 100% deductible?
The point I'm driving here is that we all really need to start paying attention to what expenses we introduce to our companies, and what's going to give us the best tax deductions. Additionally, how well are we documenting these deductions so that if we're ever audited we have the right backup. I don't believe it's that hard to do both and my firm Interactive Accountants is happy to show you how!