Tax Saving Strategies for Businesses
Copyright Robert Lee Riley, all rights reserved, do not duplicate
without permission of author.
...read and understand Tax Saving Strategies for Individuals first.
...go to page one and download the Tax Data Organizer for a
detailed list of tax saving ideas.
...IRA contributions are due April 15th. SEP/Keogh and
Qualified Plan Contributions are due by the due date of the
...deduct your office in home expenses based upon the percent
of floor space, including storage. The IRS has relaxed the home
office rules; it is no longer a red flag.
...if you have self employment income, consider forming a
corporation to limit your liability and save taxes. S Corps (pass
through entities) often are the preferred choice for businesses
that expect to have fewer than 75 shareholders and one class of
stock. C Corps are popular for deducting medical insurance.
...an S Corp may help your marketability especially if you work
for large corporate clients because it avoids personnel and tax
costs to the employer.
...Limited Liability Corps are popular for businesses with gross
receipts less than $250,000.
...my Tax Data Organizer has a more detailed description of the
different types of corporations.
...purchase equipment and take advantage of bonus
...if self employed, hire your children.
...avoid or defer income recognition to another tax year. Defer
year end bonuses and/or delay your year end billings.
...use your debit or credit cards, and checks, for all
expenditures, avoid the use of out of pocket cash because
receipts are often lost.
...post your debit and charge card expense statements, and
cancelled checks to Quicken each month. Also post any out of
pocket cash expenditures.
...the IRS will expect you to be able to reconcile your bank
deposits to the gross income shown on your tax return. If you
cannot, the statute of limitations is extended to seven years.
...pay your state FTB estimated tax payment in December - it is
due in January but you get a current year deduction.
...generally, avoid the SEP-IRA in favor of the QRP Qualified
Retirement Plan (but see below). The contributions are very
limited and withdrawals do not receive the favorable capital gain
and forward averaging treatments.
...the SEP-IRA is a popular choice if you have numerous
employees and wish to avoid the paper work and make small
pension plan contributions.
...if you have a corporate QRP pension plan, you can borrow
from the plan tax free as long as you pay the money back as a
...to be continued as time permits, check back.
|Robert Lee Riley CPA, MBA-tax