{"id":172,"date":"2021-04-05T13:40:00","date_gmt":"2021-04-05T13:40:00","guid":{"rendered":"https:\/\/taxresalecertificate.org\/blog\/?p=172"},"modified":"2021-03-29T13:41:05","modified_gmt":"2021-03-29T13:41:05","slug":"how-to-reduce-small-business-taxes","status":"publish","type":"post","link":"https:\/\/taxresalecertificate.org\/blog\/how-to-reduce-small-business-taxes\/","title":{"rendered":"How To Reduce Small Business Taxes"},"content":{"rendered":"\n<p><strong>Hiring A Family Member<\/strong><\/p>\n\n\n\n<p>Employing a family member allows you to shelter income from taxes. Small business owners can even hire their own children. You can pay a lower marginal tax rate or even go as far as eliminating the tax on income paid to one\u2019s child.<\/p>\n\n\n\n<p>A sole proprietorship does not need to pay the <a href=\"https:\/\/www.irs.gov\/individuals\/international-taxpayers\/federal-unemployment-tax\">Federal Unemployment Tax<\/a> or FUTA tax for a child or spouse. This tax is defined as a piece of legislation that imposes a payroll tax on any business with employees. The revenue it generates is allocated to state unemployment insurance agencies and used to fund unemployment benefits for people who are out of work. This can lead to great savings. Also, depending on the circumstances of the job, you might even be able to put aside some retirement savings for them.<\/p>\n\n\n\n<p><strong>Healthcare Savings<\/strong><\/p>\n\n\n\n<p>Medical costs are rising and can be quite expensive. It is smart to save money for unexpected health care expenses even if you are healthy now. This can be accomplished through a <a href=\"https:\/\/www.healthcare.gov\/glossary\/health-savings-account-hsa\/\">Health Savings Plan <\/a>or HSA.<\/p>\n\n\n\n<p>An HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums. This will help greatly in lowering taxes associated with medical costs.<\/p>\n\n\n\n<p>HSA helps you save in taxes by letting your contributions be pretax, letting them grow tax-free, and allowing any withdrawals to also be tax-free. They are an invaluable source of savings and peace of mind.&nbsp;<\/p>\n\n\n\n<p><strong>Home Office Expenses<\/strong><\/p>\n\n\n\n<p>Using part of your home for business allows you to deduct expenses for the business use of your home. This can be applied to all types of homes including business owners who rent.<\/p>\n\n\n\n<p>If you use your home exclusively and regularly for conducting business you can deduct the following:<\/p>\n\n\n\n<ul><li>Mortgage Interest<\/li><li>Insurance<\/li><\/ul>\n\n\n\n<p>To qualify for the home office deduction, you must show that your home is used regularly and exclusively for conducting business and is the principal place of business.<\/p>\n\n\n\n<p>There are two methods for calculating the house office deduction. In the standard method, you use Form 8829 to itemize the various expenses involved in using and maintaining your home office. This includes rent or mortgage interest payments, utilities, homeowners insurance premiums, and property taxes. In the simplified method, you determine the square footage of your home office (up to 300 square feet) and multiply it by five dollars.<\/p>\n\n\n\n<p>The simplified method is more straightforward but you should see which one gives you a larger deduction amount.<\/p>\n\n\n\n<p><strong>Advertising<\/strong><\/p>\n\n\n\n<p>Self-Employed people should keep in mind that all advertising costs are fully tax-deductible.<\/p>\n\n\n\n<p>This can include the following<\/p>\n\n\n\n<ul><li>The cost of printing business cards, flyers, and mailers<\/li><li>Social media advertising like Facebook ads<\/li><li>Promotions at conventions and trade shows<\/li><li>The cost of advertising agencies<\/li><li>Television and radio advertising<\/li><li>Employing freelancers<\/li><\/ul>\n\n\n\n<p>You can also deduct all commissions paid to non-employees for sales and marketing purposes. This can include payments to individual sales reps, or marketing channels, and a platform like Amazon.<\/p>\n\n\n\n<p><strong>Business Travel Expenses<\/strong><\/p>\n\n\n\n<p>The Internal Revenue Service defines a business expense as the ordinary and necessary expenses associated with traveling away from your home for your business, profession, or job. These expenses cannot be extravagant or used for personal purposes.<\/p>\n\n\n\n<p>The following are valid business expenses:<\/p>\n\n\n\n<ul><li>Travel by airplane, train, bus, or car between your home and your business destination. (If you\u2019re provided with a ticket or you\u2019re riding free as a result of a frequent traveler or similar program, your cost is zero.)<\/li><li>Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel, and the work location, and from one customer to another, or from one place of business to another.<\/li><li>Shipping of baggage, and sample or display material between your regular and temporary work locations.<\/li><li>Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.<\/li><li>Meals and lodging.<\/li><li>Dry cleaning and laundry.<\/li><li>Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)<\/li><li>Tips you pay for services related to any of these expenses.<\/li><li>Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer\u2019s fees, computer rental fees, and operating and maintaining a house trailer.)<\/li><\/ul>\n\n\n\n<p><strong>Get A Tax Resale Certificate<\/strong><\/p>\n\n\n\n<p>As a savvy small business retailer, you must be aware of how to utilize<a href=\"https:\/\/taxresalecertificate.org\/\"> tax resale certificates<\/a> to your best advantage. In short, a tax retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell, such as wood for a cabinet.<\/p>\n\n\n\n<p>You must understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail.&nbsp; It would be considered fraud not to pay sales tax on these items.<\/p>\n\n\n\n<p>If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.&nbsp; Some states call them exemption certificates or reseller\u2019s permits.<\/p>\n\n\n\n<p><strong>That Is Why We Are Here To Help<\/strong><\/p>\n\n\n\n<p>Understandably, all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemption status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.<\/p>\n\n\n\n<p>On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business\u2019s standing and reputation. At <a href=\"https:\/\/taxresalecertificate.org\/\">Tax Resale Certificate,<\/a>&nbsp; we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hiring A Family Member Employing a family member allows you to shelter income from taxes. Small business owners can even hire their own children. You can pay a lower marginal tax rate or even go as far as eliminating the tax on income paid to one\u2019s child. A sole proprietorship does not need to pay [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/posts\/172"}],"collection":[{"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/comments?post=172"}],"version-history":[{"count":1,"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/posts\/172\/revisions"}],"predecessor-version":[{"id":173,"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/posts\/172\/revisions\/173"}],"wp:attachment":[{"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/media?parent=172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/categories?post=172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxresalecertificate.org\/blog\/wp-json\/wp\/v2\/tags?post=172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}