Taxes can be an increasing burden for many small business owners in Manhattan. However, there are a few methods you can utilize to mitigate growing tax amounts. With a bit of planning and the right information, you can work to keep your business’s taxes in check from one year to the next.
Inc. provides a number of useful tips capable of decreasing the amount of taxes your business owes. Smart planning of business expenses is just one method that will allow you to reduce your overall tax bill. One example of this is for employee reimbursements related to use of personal vehicles for work duties. Creation of a so-called “accountable plan” will allow you to reimburse your workers appropriately without these reimbursements being categorized as a type of income, which in turn lessens associated payroll tax totals.
Structuring can also help you save on taxes. Changing from an LLC to a corporation can result in a rate deduction as the amount of profits your business earns increases. These rate reductions usually come into play after your company surpasses the initial $50,000. Setting up a plan dedicated to retirement savings is another good option, which will enable you to make specific deductions or even defer taxes owed until your retirement officially begins.
While you may offer things like raises to keep employees happy, providing your workers other types of benefits instead can help you lessen your tax burden. Offering assistance for health care funding is one method that can reduce both your business’s taxes as well as an employee’s tax costs. That way you can express your appreciation for a job well-done without incurring additional expenses.