Hey there, business owner! Taxes can feel overwhelming, right? But here’s the good news: there are simple, smart strategies you can use to reduce your tax bill and keep more of your hard-earned money. At Insogna CPA, one of the best CPA firms in Austin, we work with business owners like you every day to save money and stress less about taxes.
Ready to take control of your taxes? Let’s dive into six strategies that can make a big difference for your business.
1. Maximize Your Retirement Contributions
Have you thought about how your retirement savings can also save you on taxes? Contributing to a retirement plan is one of the easiest ways to lower your taxable income while planning for the future.
Here’s What You Can Do:
- Set up a SEP-IRA to contribute up to 25% of your compensation.
- Use a Solo 401(k) to take advantage of higher limits by contributing as both the employer and employee.
- If you’re a high-income earner, consider a defined benefit plan for even bigger tax savings.
Why It Matters: Every dollar you contribute reduces your taxable income, meaning less goes to the IRS and more stays in your pocket.
Pro Tip: Talk to a small business CPA in Austin to figure out which retirement plan works best for your goals.
2. Properly Structure Your LLC for Tax Savings
Did you know that how your LLC is taxed can make or break your tax strategy? It’s true! The right structure can save you thousands.
What to Consider:
- Electing S-Corporation status can help you save on self-employment taxes by splitting your income into salary and distributions.
- A C-Corporation might be a good fit if you’re reinvesting profits back into the business.
Why It Matters: The right tax structure reduces your tax liability and aligns with your financial goals.
Pro Tip: Not sure if your business is set up correctly? Let an Austin, Texas CPA help you review your structure.
3. Hire Family Members for Legitimate Work
If your spouse or kids help out with your business, why not pay them for their contributions? Hiring family members isn’t just practical—it’s tax-smart.
Benefits Include:
- Wages paid to children under 18 are exempt from Social Security and Medicare taxes (for sole proprietors or partnerships).
- Shifting income to family members in lower tax brackets can reduce your overall tax bill.
Why It Matters: Keeping money in the family while lowering your taxable income? That’s a win-win!
Pro Tip: Need guidance on payroll compliance? Reach out to a CPA in South Austin to ensure everything is set up correctly.
4. Keep Track of Every Business Expense
You’re probably spending money every day to run your business—don’t let those expenses go to waste. Tracking them carefully means more deductions for you.
What You Can Deduct:
- Office supplies and subscriptions.
- Travel expenses, meals, and client entertainment.
- Home office costs if you’re working remotely.
Why It Matters: Every expense you deduct reduces your taxable income, which means you keep more of what you earn.
Pro Tip: Use tools like QuickBooks to track your expenses, or let an accounting firm in Austin handle it for you.
5. File Taxes Accurately and On Time
We get it—filing taxes isn’t fun. But late or incorrect filings can lead to penalties, interest, and unnecessary stress.
Here’s How to Stay Ahead:
- File all tax returns (income, payroll, and sales tax) by their deadlines.
- Double-check everything for accuracy to avoid audits.
- File for an extension if needed, but remember to pay what you owe to avoid penalties.
Why It Matters: Filing on time and accurately helps you avoid unnecessary costs and keeps the IRS happy.
Pro Tip: Don’t want to worry about deadlines? Let an Austin, TX CPA firm handle your filings for you.
6. Work with a Proactive CPA Firm
Look, you’ve got enough on your plate running a business. Why not let a CPA help you save time and money? A proactive CPA doesn’t just file your taxes—they create a strategy to lower your tax bill year-round.
Here’s What a CPA Can Do for You:
- Find deductions you might have missed.
- Stay on top of ever-changing tax laws.
- Help you plan for the future with a customized tax strategy.
Why It Matters: Having a CPA in your corner ensures you’re not overpaying taxes and gives you peace of mind.
Pro Tip: Insogna CPA, one of the most trusted CPA firms in Austin, Texas, is here to help you maximize your savings.
Let’s Reduce Your Tax Bill Together!
Reducing your tax bill doesn’t have to be complicated. By taking small, smart steps like maximizing deductions, adjusting your business structure, and working with a proactive CPA, you can save money and focus on growing your business.
Ready to take control of your taxes? Schedule a free consultation today with Insogna CPA, your trusted partner for Austin accounting services.
Let’s build a tax strategy that works for you—because you deserve to keep more of what you earn!