Zach Olson is the Founder & CEO of TaxAlli.com. At Tax Alli, we pair you with real life accountants and use cloud software to make small business accounting awesome. So you can do what you love while we handle the rest.
Tired of always stressing when tax time rolls around? There are myriad ways you can reduce the amount you owe in taxes next April, including deductions and other means. However, if you don’t know what they are, they can’t help you!
Here are a few things you can do right now to help make next year’s tax time just a little easier for yourself.
1. Business Related Education
This is the perfect example of a deduction that works double for your business. The language of business changes all the time, and you can never stop learning. If you do, you run the risk of falling behind your competitors and losing customers.
Whether you buy books or attend seminars all over the country, there are plenty of opportunities for you to grow your brain and your company. If you go ahead and pay for this education in 2014, these expenses can also be used as a tax deduction on your upcoming taxes.
2. Buy Now, Tax Later
Do you have a bunch of office related expenses coming up? If you wait until the New Year, you won’t be able to take deductions on them until 2016. If you buy them now, you can use them come tax time, meaning you get a much bigger break.
So take a good look around your office and see what you can upgrade. Computers, furniture, even pens – all of it can lead to a nice healthy break when the taxman comes calling soon.
3. Contribute to Charity
Another deduction that can also do wonders for your business is contributing to charity. One great example is taking all your old furniture and office supplies and giving them to a place like Goodwill rather than selling them off. All you have to do is make sure to get a receipt.
This could potentially give you a bigger money boost than selling them outright. Also, charitable donations always look good for a business. It means you care about the community you operate within. And charitable giving just makes you feel good!
4. Add More to Your QETs
Quarterly estimated taxes, or QETs, are a huge pain for every business owner. So why would you want to add more to them? Simple: the more you pay now, the less you have to ultimately worry about later on.
While the “Safe Harbor Rule” allows businesses to only pay the same amount they owed the previous year, this doesn’t mean you have to stick to this. You could potentially pay a bunch more each quarter of the year so you don’t end up owing a large bill come the big tax day in April.
5. Defer Income
Your natural inclination as a business owner is to take in as much money as you can. However, this might not be the best thing for your business, believe it or not. Deferring payment from your clients until next year could actually help you out.
For example, let’s say you finished a job for a client that’s due December 31st. If they pay on that day, you owe taxes for the job in 2015. If you defer payment until January 1st, though, you wouldn’t owe taxes until 2016, meaning your 2015 taxes are that much simpler!
These are just a few suggestions, and your particular case might be very different. State tax laws, for instance, might totally change everything, so it’s best to always consult with your nearest tax professional if you have questions.