What are some ways a business owner can minimize taxes
All these methods are perfectly legal and encouraged.
1. Figure out when you spend the most money on your business on things like inventory, maintenance, and salary bonuses. (you can move salary bonuses to other dates besides Christmas) Then adjust your fiscal year to end directly after you spend all your money. Businesses as you know get taxes on what they have left after expenses.
If you spend any money training yourself or employees it can be deducted.
Environmental Upgrades can earn your tax credits from the government although I'm not up to date with them but they'd be worth looking into.
2. As an individual you can deduct things that you personally spend to conduct business. If you do anything from home you get to deduct percentages of your home's expenses as a cost of doing business. Take for instance internet, heating, lighting, even office space. For home office space you need to find out the market price for the square footage of space you're using then you can deduct that as an expense.
Save all your receipts because vacations and things like dining out can be deducted in part if used to promote a business or to hold meetings and/or achievement celebrations throughout the year. Even the company Christmas party can be done this way.
3. And finally the depreciation of your assets with in the company can be deducted to a certain extent. I don't know the exact percentages but things like computer equipment building maintenance and general upkeep can be written off almost completely.
IRS Revenue Code 162 (a) There shall be allowed as a deduction all the ordinary and necessary expenses paid for or incurred during the taxable year to carry on any trade or business.
Revenue Code 212 IN the case of an individual, there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income.
I hope this helps. Feel free to contact me further if you have any specific questions. Good luck!
Dashius · 6 years agoSource: answers.yahoo.com