Tax-wise Strategies for Your Small Business and Personal Success

By Eric Tyson

Part of Small Business Taxes For Dummies Cheat Sheet

Starting and operating a small business involves many moving parts and issues. Taxes permeate just about everything that you do. Taxes are too often maddeningly complicated. Most folks’ single biggest “expense” is their tax bill. And for tens of millions of small business owners, U.S. tax laws are a complex and constantly changing web ready to trip them up and siphon off their most precious and valuable business resource — their money!

Handled in the best possible way, you can save yourself tens of thousands — if not hundreds of thousands — of dollars by making informed tax moves. And you can comply with the tax rules and regulations and stay out of trouble with the Internal Revenue Service and your state and local tax authorities.

  • Take charge of your income taxes. Find out enough about the tax laws to prepare your own return and handle your own decisions or intelligently hire a quality tax advisor.

  • Get and stay organized. Keep your tax and financial documents well organized throughout the year. Doing so saves you many hours when preparing your return and also when making important decisions.

  • Understand and use the tax laws to legally reduce your income taxes. If you educate yourself about the tax laws and incentives, you can significantly and permanently reduce the income taxes that you pay over your lifetime.

  • Make use of retirement accounts. Be sure that you and your employees take advantage of opportunities to contribute to retirement accounts, which reduces your income tax bill both now and in the years ahead.

  • Seek tax help when your situation changes or becomes complicated, or you lack the time to do your taxes well and correctly. Tax advisors can be costly year after year, but a good advisor should save you money and help you with the most difficult issues and returns.

  • Learn from your return. Don’t simply file your return in a folder after you complete it. Use the information on it to plan ahead for the next tax year.

  • Keep your taxes in perspective. Life has so much more to offer than just working and making money. If you do such a good job with your small business and minimizing your taxes that you gain great wealth, don’t forget to enjoy the fruits of your labors.