As a service-based business owner, you might feel like taxes are eating into your profits. The truth is, there are strategies to minimize your tax burden, but they require proactive planning and expertise.
Here are five tax-saving strategies tailored for businesses earning $250,000+ in annual revenue:
- Maximize Deductions:
Are you fully leveraging deductions for home offices, travel, and business meals? Many service-based businesses leave money on the table because they fail to document expenses properly. - Depreciate Assets:
If you’ve invested in equipment, software, or office improvements, depreciation can reduce your taxable income. The Section 179 deduction allows you to write off certain assets in the year they’re purchased. - Set Up a Retirement Plan:
Consider setting up a Solo 401(k) or SEP IRA. These plans not only secure your future but also reduce your taxable income today. - Structure Your Business Wisely:
If your business isn’t already an S Corporation, you may be overpaying in self-employment taxes. A tax professional can help you evaluate your business structure for maximum savings. - Hire Your Family:
If you have family members helping with your business, hiring them can reduce your tax burden while keeping wealth in the family.
By implementing these strategies, you could save thousands of dollars annually. But these aren’t one-size-fits-all solutions—work with an advisor who understands your unique business needs.
Don’t wait until tax season to start saving. Book a tax strategy session today and learn how proactive planning can benefit your bottom line.
