As we all know, there are only two things in this world that are truly inevitable: death and taxes. There is really nothing that anyone can do about both, so it is useless to think that it can be avoided. However, you can at least make the experience much easier and as painless as possible, especially when it comes to taxes.
Now a good accounting firm can advise you accordingly in these matters, so such a service will definitely come in handy if you want to start another small e-commerce business. Of course, you can make your life a lot harder by doing it all yourself. But really, why would anyone want to do that?
Whatever cost you may save by doing your own accounting is not worth the hassle, hassle, hassle and hassle that you will experience getting to know the ins and outs of taxes and other aspects of your business finances. . So save yourself the hassle of hiring a good accounting firm to help you with the financial aspects of your online business, especially with your taxes, as the IRS is not too little effort.
Here are some practical tax savings measures that a good accounting firm can advise you on and help you implement:
Start a 401 (k) retirement plan for your employees.
The general idea among small businesses is that their respective businesses are too small to offer a 401 (k) pension investment plan to their employees. But the truth is that even a sole proprietorship can already offer such a plan. Members of the plan can contribute up to $ 16,000 per year in tax revenue ($ 22,000 for those over 50). And by simply drawing up a 401 (k) retirement plan for your employees, you’ve been enjoying a huge $ 500 tax credit for three years.
Of course, drafting such a scheme means additional requirements and regulations that must be followed. A good accounting firm can handle a lot of the work, and can make sure that your calculations are correct and that your payments are made on time.
Keep a flexible spending account (FSA).
You will be happy to know that money deposited on your own and your employees’ flexible spending accounts or FSA will not be paid. Not only that, but FSAs can use up to $ 2,500 a year for eligible medical expenses. This then makes it an excellent alternative to health insurance if your e-commerce business does not offer a comprehensive health plan. FSAs can also be used to cover childcare costs of up to $ 5,000 and other such dependent costs.
Pay salaries to your family members.
Note that a person can earn up to a certain amount per year without paying federal taxes. This is a particularly useful provision to take advantage of. You can simply pay a family member to provide services to your business up to this amount, so that he or she does not have to pay taxes, while you and the business can claim a deduction themselves.
Make use of travel expenses.
You can actually claim deductions for travel. It can go up to $ 0.50 per mile. Not only that, but you can also enjoy parking and tolls.
Take advantage of repair costs.
You will be happy to know that repairs are done, although capital improvements are not deductible. It covers repairs to equipment, furniture and other items used in the day-to-day operations of your business. The best way to reduce your tax liability through repairs is by doing the repairs before the end of the year. Also keep these repairs free of capital improvements so that confusion is avoided and you can easily justify it.
Invest in new equipment.
By law, new and used equipment and software are eligible for an improved Section 179 deduction. Not only that, brand new software and equipment also enjoys a 50% bonus deduction.
Manage your shareholder loans wisely.
If you have borrowed personal money from your trading company, you should consider charging interest on these loans. This will help you keep the taxable income of the business below the threshold of small businesses. This way you can significantly reduce the tax rate.
Cancel bad debts.
You need to keep detailed records of your efforts to progress with criminal clients who owe you money. If by the end of the year you still cannot collect from these people, you can already declare the amount as a bad business debt and enjoy a deduction for it.
Get health care.
Currently, small businesses account for up to 50% of their employees’ healthcare plans. This allows you to claim a deduction of up to 35% on the premiums paid for the year.
Hire new employees.
Under the HIRE Act, you can enjoy a wage tax exemption of 6.2% for wages by simply hiring workers who were previously unemployed.
You might be surprised to know this, but 50% of the meals and entertainment expenses are deductible as long as it is incurred as part of a business venture. Not only that, parties are 100% deductible, as long as all employees are invited to participate.
Present Employee Ownership Plans (ESOP).
Have your business valued privately, and reward employees with partial ownership! Not only is this a great motivation, but ESOP inventory contributions are also tax deductible and enjoy numerous tax incentives.
By simply starting your own trading business, you can deduct up to $ 10,000 on your start-up costs. This may include prior expenses, such as market research, advertising, training, consulting, and more.