If you think you owe X dollars in taxes, you’ll probably be able to pay less. Don’t settle for the amount a mediocre bookkeeper tells you to pay. Smart business owners will be able to drastically reduce their taxes.
Don’t do anything that breaks the law because it will catch up with you, but there are lots of legal ways to give the government less money. Let’s look at a few tactics you can use to keep your wallet nice and fat.
1. Start Saving For Retirement
If you speak to a company that specializes in tax planning and optimization for companies, they’ll tell you to start saving for retirement. You should be saving the maximum allowed if you have extra money lying around.
Once you send lots of money into a retirement plan, there will be less to tax. You’ll still have to pay the taxman when you retire, but it’s a few years away. Talk to your employees about contributing to their retirement too.
2. Taking Care Of Your Health
You probably feel invincible if you’re young, but it won’t always feel that way. There is a good chance you’ll end up in hospital when you’re older. If it’s serious, it’s going to cost you a lot of money.
Find out if you can put money into a Health Savings Account (HSA). If you’re allowed, you’ll be able to tuck some of your money away for a rainy day. Everyone with a high deductible will smile when they get their bills.
3. Structure Of Your Business
When you started your business all those years ago, you probably sought advice when deciding on the structure. If you’re a limited liability company (LLC), you’re the same as most other small businesses.
Can you wipe out the employer portion of your Medicare and Social Security taxes? Can you change the amount of money you pay yourself to reduce your taxes? You should look into changing the structure of your business.
4. Hiring A Few Family Members
Employees only pay tax on the money they earn above a certain threshold. If you employed a family member who didn’t have another job, you could pay them a low wage. They wouldn’t pay tax if you paid them the right amount.
The money would still end up in your household, so your family would benefit from it. Just make sure you’re doing everything legally. When you delve into gray areas, you must be careful you don’t end up in trouble.
5. Combine Business + Personal
When you fly somewhere on holiday, try to do something business-related while you’re there. If you visit a restaurant, it could turn into a business lunch. The car you drive daily could be a business vehicle.
You should try to find a way to combine your personal and business life. It’s possible to pay for your business expenses instead of paying extra tax, which is one of the reasons why rich people don’t give much to the taxman.
Don’t Throw Your Money Away
When you pay too much in taxes, you’re throwing money away. Implement these tips if you’re sick of giving everything to the government.