How Can I Reduce My Taxable Income?

Tiffany/ December 17, 2020/ Pet and Animal

From business expenses to careful investments, there are a variety of strategies that smart business owners can use to reduce the portion of their business income that can be taxed situs judi online. Know which deductions you can legally make.
“Many small business owners are unaware of deductions and are missing out on money that can be saved every year,” said Gary Milkwick, chief product officer of 1-800Accountant.

Milkwick named some of the most common business expenses owners can deduct from their taxes:

Expenses and mileage for personal vehicles that are used for business
Cell phone bills, if the phones are primarily used for business
Costs of operating a business from home, such as a portion of your mortgage, rent or utilities
50% of meal and entertainment expenses with existing or potential partners, employees, contractors and clients
Costs to purchase business equipment, such as computers, printers, monitors and phones
Setting up and contributing to retirement plans

Make smart purchases and investments.
If you’re going to invest in new equipment or services for your business, the timing of those purchases can affect your tax liability this year or next year, said Milkwick. Starting in January, plan out what you’re willing to invest in before the end of the year.

“If it’s November, and you’re planning on purchasing equipment within the next several months for a business expansion, for example, it may make sense to accelerate the purchase … before the end of the year to get the tax deduction in the current year,” Milkwick told Business News Daily. “[The] same goes for services. If it’s toward the end of the year, and you’re planning on a large marketing campaign over the next several months, it may make sense to prepay for some of the costs to take the deduction in the current year.”

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