Top 5 Tax Deduction Strategies For A Successful Business

May 16, 2012 by  Filed under: Taxes 

Learning the complete tax book by heart and implementing all the effective tax strategies can increase your profits for your business’ benefit.

1. Keep track of tax deductibles from mutual funds.

The mutual funds kept under the portfolio managers can help in saving tax losses through efficient tax strategies. The turnover rate can be mentioned in the lower ranges to lower the tax loss for shareholders. Tax profits can also be used to counterbalance your tax losses. They key is to manage a low profile for terms like turnover and absenteeism.

2. Invest in municipal bonds and bond funds.

Every bond is liable to federal taxes but the good thing about municipal bond is that these are exempt from all such taxes including local or any state related taxes. To keep your tax losses at a low, invest your company money in municipal bonds. If you have a lot of money, municipal bonds will give you a large amount of profit over other rival companies and will also offset your losses.

3. Provide added tax advantage to the retired.

If implemented carefully, this can be one of the best business tax solutions that you might apply in your business. If you are above the age of 50, you can put your hand in the supply of around $5,000 to IRA along with an amount of $1000. Certain ethnic IRA policies provide tax deferrals which mean that no tax will be paid on any retiree’s earnings until a request for withdrawal is made. Making good use of retirement vehicles and investing in their no tax deduction rule can save up a lot of profit for any fiscal year.

4. Losses can also be advantageous.

One of the best tax strategies in the business market is to take advantage of your losses along with your gains. Selling an investment can be quite costly in terms of payment through tax so by holding off your investment for a full year, you can not only increase your profit opportunity but with the same amount of tax loss as before, if you had sold it earlier. The maximum tax in such a case is 15% on all capital gains. Dividend income plays by the same rules, so keep it for a longer time (less than a year) and still pay the regular fees of 35%. If you lost money on any investment and now you want to sell it, the best time is to sell it by December 31 as the year’s tax return will supply you with a handsome amount of $3000. This is one of the perfect business tax solutions to offset future losses.

5. Reduce your IRS penalties.

IRS is one of the cleverest tax collectors that you will come against in your pursuit of running a successful business. The worst part is that if you do not pay your IRS tax on time then you become liable for IRS tax penalties with a handsome interest rate (around 47% of your yearly capital). And this figure may increase with every passing year, so you need the perfect tax strategies to overcome this huge loss. Adding together all the aforementioned IRS taxes and interests will produce a huge IRS Tax Debt which is 50% greater than the original amount you owe to them. So paying up your taxes in the first place is a great idea but the IRS Penalty Abatement petition is also a solution if you are too late.

If you have a reasonable cause for IRS regarding any accident or loss in your business or any other unfortunate incident then the IRS becomes liable to not implement any penalties. The list of excusable reasonable causes has been given by IRS. Such business tax solutions can help your small or large business in counterbalancing your losses with gains in terms of tax.

Jack handles online branding and management for small and medium sized companies. Working for SPW UK, a London Chartered Accountancy Firm.

If you are looking for a team of reliable, approachable, and proactive accountants who will do more than just respond to your needs but work alongside you to help you succeed, visit our Chartered Accountants Firm London

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