Fox Business’ Marcia Passos Duffy reports on how small businesses can minimize their taxes with just a little planning prior to tax season. She notes that maximizing business deductions and meticulous record keeping are the most common methods to reduce taxes, but she offers five additional ways a small business can lessen its tax burden. First, hire family. You do not have to pay federal unemployment taxes to family members that work for you and depending on the wages you pay you may not have to withhold income taxes or Social Security if your child works for you. It is important to keep in mind that you must comply with wage and child labor laws. Second, use independent contractors. You are not required to withhold payroll taxes for independent contractors, but it is imperative that you understand the rules of classifying someone as an independent contractor versus and employee. Third, be generous. Consider donating gently used office equipment to a charity that is qualified to receive tax-deductible donations. Fourth, pay those bills. Try to pay your January bills in December, so that you can deduct those expenses. And lastly, buy now. You will save more in small business taxes if you purchase business equipment and products prior to January.
Five ways to cut small-business taxes
Published: July 29, 2010Posted in: Articles
My name is Chinwe Onyeagoro and I am the editor of New Equity Daily. Five years ago I started a small business called O-H Community Partners in Chicago and one of the lessons I’ve learned is it’s not enough to simply concentrate on producing a good product or providing quality service or offer the best price. There’s an extra component that is crucial to the survival and growth of our businesses: funding and financing whether we are starting up or trying to maintain our operations or planning to grow. Without adequate funding, small businesses like ours run the risk of stagnating, or even closing. Financing is out there. It’s available. It’s just harder to find.
Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!