1. Deductible Expenses: Ensure that all eligible business expenses are claimed on your taxes, such as advertising, rent, utilities, and employee wages.
2. Retirement Contributions: Consider contributing to a retirement plan for your employees, which can reduce taxable income for the business and provide long-term benefits for your employees.
3. Tax Credits: Take advantage of available tax credits, such as the Work Opportunity Tax Credit for hiring certain disadvantaged individuals or the Research and Development Tax Credit for qualifying R&D activities.
4. Depreciation: Utilize depreciation for business assets to spread out the deduction of the cost of the asset over its useful life, reducing tax liability in the short term.
5. Health Insurance: If you are self-employed, consider deducting health insurance premiums for yourself, your spouse, and your dependents to reduce taxable income. 1. Redomiciling the business to another state or offshore can save money on state and local taxes.
2. Companies can defer paying capital gains taxes by selling commercial real property and using the proceeds to buy another qualified property through a 1031 exchange.
3. Conducting a cost segregation study on the replacement property can determine how much of the property’s value is the building, which can be depreciated to provide a tax deduction for the company.
4. Businesses should consider taking advantage of various tax benefits provided by the federal and state governments during COVID, such as the Employee Retention Tax Credit, Paycheck Protection Program, and Economic Injury Disaster Loan. 1. Implementing tax-deferred retirement plans for employees.
2. Taking advantage of tax credits and deductions available to your industry.
3. Structuring business transactions to minimize tax liability.
4. Utilizing tax-efficient investing strategies for corporate cash reserves.
5. Incorporating in a state with favorable tax laws for businesses.
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