4 tips for small business owners to optimize 2021 tax season
After a difficult 2020, business owners are hoping to bounce back stronger than ever.
With the new year upon us, it can be easy to consume yourself in your new business plans and efforts to adapt. Eventually, business owners will have to step back into the accounting world and prepare for the not-so-exciting tax season.
There’s another way. Here are some tips on how you can look forward to and take control of your tax preparation so you can focus on the bigger picture of business growth.
Deduct, deduct, deduct
A great New Year’s resolution might be to keep better track of all expenses. Your bookkeeping will benefit but so will your taxes.
Any business expenses that relates to travel, home office, property and education qualify as a deduction of your taxes.
By keeping track of every expense, your business can position itself to maximize its return this tax season.
Invest in accounting
Small business owners are efficient machines but will from time to time benefit from the guidance of an accounting expert.
An accountant will review payroll, help modify budgets and make sure you don’t miss tax deadlines or incur tax penalties.
Software programs are a great start and deliver to your business the accounting essentials that will keep it running in high gear.
Begin early retirement
Small business owners can invest in early retirement to earn their maximum retirement time.
Early retirement planning is necessary because it creates greater flexibility for employees to earn more without having to work beyond a certain age requirement. Employees can contribute to the federal myRA plan to a ROTH IRA bond investment account without any extra fees or penalties.
Also, employees can invest up to $13,500 of pretax salary into a SIMPLE 401(k).
Search for every tax advantage
Tax codes are complex, but they are also riddled with tax advantages.
Small businesses can save on their taxes through reclassification or incentives.
If your business goes annual with taxes, for instance, you can save on the time and money of filing on a quarterly basis. Your small business can also benefit from certain credits for hiring veterans or providing child care services to employees. You can even save up to 50% on medical care taxes through a medical reimbursement plan.
5 Star Business Consulting can streamline business processes so you can better maintain your true business intention. We deliver on a range of business services, including tax preparation, payroll, human resources, training and advisory help that usher in greater operational ease so you can focus on running your business.