| Hi Taylor:
I feel like I paid too much in taxes this year. I own a small consulting
firm and think I must be missing out on deductions or something because
I really took a hit. Are there simple tricks I'm missing? - Alex
Hi Alex: Sorry to hear that. Tax season certainly isn't my favorite
time of year either, but I've learned a few coping mechanisms that
help me survive. I've also got a few ideas for how business owners
can lower their burden, and hopefully some of this info will benefit
fringe benefits for employees. How you pay people has a big
effect on your taxable earnings. Bonuses and wages are going to
be taxed, but health insurance and other benefit programs allow
you to essentially pay employees without getting dinged by the
IRS. It will depend on the type of work and who you employ, but
you can consider things like disability insurance, education assistance,
transportation benefits, dependent care assistance and a handful
of other programs that ease your tax burden while still ensuring
your workers can make ends meet.
2. Start earlier. There's no trick better than effective planning.
If you can start getting your books in order in December of the
taxable year, you can take big steps toward reducing your liability.
For one thing, you can push invoices into the next year if it
looks like you exceeded earnings expectations. You'll have to
account for that money the next time around, but at least you'll
know about that heading into the new year. You can also make last-minute
donations and purchases to increase your write-offs. It's really
easy to put off filing until March or April since tax preparation
is such a pain in the neck, but starting early almost always leads
to a smaller payment when all is said and done.
3. Donate mindfully. Charitable donations are a great way
to reduce the amount you owe, and donating to causes that align
with your mission statement can do more for your company than
you might expect. You can take some money off the books and reduce
your liability while also motivating local customers to use your
consulting firm and driving up your returns. For someone overpaying
on taxes, the right donation can make a huge difference.
| As a business
owner, April 15 will never be a day you look forward to. However,
you can definitely take steps to make it a little less painful. Hope
© Taylor Kovar
April 15, 2022
More "Go Far With Kovar"
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an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
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