Do you want to lower your small business tax bill but do not have time to become a tax expert? As a small business owner, you take on many roles; however, accountant should not be one of them. It would be great if you could easily reduce your tax burden without pouring over complicated tax rules, right? Good news: it is possible!
Here are some strategies an experienced accountant can help you implement:
The Power of Cash Accounting
If your business uses the cash method of accounting, you have a surprising amount of control over when income and deductions are recognized for tax purposes. Use this flexibility to your advantage by making sure to:
- Accelerate Deductions:
Take a close look at expenses you would usually pay in the early part of next year. By putting these on a credit card now, you secure the deduction on your current tax return, even though you will technically pay the credit card bill next year. But that is not all – other expenses, such as insurance and rent, might also be eligible for prepayment.
- Deferring Income:
If you have reliable clients, consider sending invoices out close to year-end. This shifts the income into the next tax year, potentially giving you a break on your current tax bill. Businesses using the accrual method can sometimes use a similar strategy by strategically timing the completion of projects or product deliveries.
Big Purchases Can Mean Big Tax Savings
Have you been eyeing new equipment, a productivity-boosting software upgrade, or perhaps even a fresh look for your office space? If you were planning to make these investments soon, consider acting now for some significant tax benefits:
- Bonus Depreciation:
For assets placed in service this year, you may be able to deduct a large percentage of the cost through bonus depreciation. This means a major portion of your purchase price immediately reduces your taxable income.
- Section 179 Deduction:
This powerful tax break is a favorite among small and medium-sized businesses. In many cases, it allows you to write off the entire cost of equipment, software, and qualifying building improvements in the same year they are placed in service. However, there are limitations, so it is best to work with an experienced tax professional to see if your plans qualify for this lucrative benefit.
Heavy Work Vehicles: An Overlooked Opportunity
Do you need a new vehicle to support your growing business? Pay close attention to those weight ratings! Heavy SUVs, pickups, and vans weighing more than 6,000 pounds (check that label on the driver’s side door) often qualify for a 100% bonus depreciation write-off. That means you could deduct the entire cost of a qualifying vehicle on your current tax return, providing a huge tax break.
We Can Help You Lower Your Small Business Tax Bill
Year-end tax moves can offer incredible advantages; however, it is critical to approach them with a plan, as some deductions might unintentionally have negative consequences within other areas of your tax return. Every business has a unique financial landscape, which is why a one-size-fits-all approach rarely yields the best results. Consulting with a trusted tax advisor is essential.
That is where Quilca CPA Group comes in! We are passionate about finding even those hard-to-spot deductions and ensuring you pay only what you truly owe. We are not just number-crunchers – we are strategic partners dedicated to finding every legal, ethical way to lower your tax liability. We will handle the complexities so you can focus on growing your business.
Reach out for a personalized consultation today at (786) 310-5582 or email us at [email protected].
