If you run a small business, you want to save money anyway you can. The US Small Business Administration has a few tips to help businesses shave a few dollars off of their tax bills at the end of the year. If you haven’t already, put one or more of these tips into practice at your business. You may find that they have other benefits in addition to a lower tax bill.
Make Charitable Donation: Businesses are allowed to deduct donations to charity from their taxes, whether those donations are cash or in-kind. Always get a receipt for each donation.
Create or Fund a Retirement Plan: The money you contribute to some retirement plans is tax deductible. Contribute up to the limit to a traditional IRA and that’s $5,000 you won’t have to pay taxes on this year. Other plans, such as 401ks, have higher limits.
Hire a Veteran: If you hire a veteran who is unemployed or disabled, you can receive a tax credit of up to $9,600, according to the SBA. In addition to saving money, you’ll gain a useful new employee.
Take Advantage of Section 179: Section 179 allows you to deduct the cost of certain equipment. The limit was $500,000 on up to $2 million worth of equipment in 2011. That limit may drop to $139,000 on up to $560,000 in 2012, though there is a chance it will be extended.
Bill Later: Pay few taxes this year by billing customers at the end of December, instead of the beginning. The customers then pay in January, and that income counts for the next tax year. Only do this if you anticipate that your income for the next tax year will be the same or less than it was this year, otherwise, you risk paying a larger tax next year.
Get Credit for Research and Development: R&D tax credits aren’t just for businesses in the tech world. You can claim these credits if your business does product testing or has engineers on staff. You can also claim them if your business is trying to diversify its products.
Record Everything: You’ll save the most money off of your business tax bill if you keep accurate books. Not only will having accurate records allow you to claim the most deductions, it will also save you money of pocket, as you won’t have to pay an accountant nearly as much.
To apply for funding for your small business, use the form on the right to begin the application process.