5 Ways To Pay Less In Taxes For Business Owners

In today's video, I'm going to explore five fundamental strategies to help you pay less in taxes. I'm smiling right now because this is one of my favorite topics. Statistics show that nine out of ten business owners and entrepreneurs overpay on their taxes. If you're raising your hand and thinking there must be better ways to pay less, you're in the right place.

We've created a comprehensive video that covers these five fundamental areas. There's also a worksheet and checklist available for you to use with your tax team or CPA. Let's equip you with strategies to lower your tax bill!

1. Tax Planning

Do you have a proactive team in place to help you strategize your tax situation? Tax planning involves regularly talking with a tax strategist and your team throughout the year. Ask yourself:

• Are you confident that you're not overpaying on taxes?
• Do you have a tax strategy?
• Do you have a proper entity structure for maximum protection and tax efficiency?
• Do you meet with your accountant quarterly?
• Are you behind on bookkeeping?

2. Deductions

Tax deductions lower your tax liability by reducing taxable income. Ensure deductions are ordinary, necessary, and reasonable. Here's a quick checklist:

1. Business meals and interest
2. Phone and internet
3. Business insurance and travel expense
4. Home office, advertising, and marketing
5. Office supplies and business use of car
6. Startup expense, education, and depreciation
7. Business casualty loss and charitable donations
8. Legal fees, moving expenses, and investment interest
9. Rent, salaries, benefits, and retirement

3. Tax Credits

Tax credits directly reduce the amount of taxes owed, unlike deductions. It's crucial to ask:

• Are you aware of 25 business and 15 personal tax credits available?
• Has your accountant reviewed your last three years of returns for retroactive credits?

4. Depreciation

Depreciation allows for tax write-offs for the loss of value in tangible assets. Ask yourself:

• Are you aware of Section 179 and 100% bonus depreciation for certain vehicles?
• Have you taken advantage of cost segregation?
• Are you leveraging depreciation with real estate investments?

5. Advanced Strategies

• Do you use the Augusta Rule for tax-free income?
• Have you hired your spouse or children?
• Have you gotten your business professionally valued?
• Do you utilize trusts and private foundations?

These strategies can significantly reduce your tax liabilities. This isn't direct tax advice, but a guide to discussing further with your tax professional. If you'd like to know more about how BetterWealth can help, follow the link below for a tax clarity call.