Three Corporate Tax Loopholes You Should Use
Right now, the big news is corporate tax reform. American companies are leaving the U.S. and the focus is on how terrible these corporate loopholes are affecting our economy. These corporate tax loopholes are really corporate tax laws that are being used by Big Business to weather the tax storm and to lower their overall tax bill legally. The silver lining in all this is these same tax laws can be used by smaller businesses to lower their income taxes and keep more money in their pocket.
Even though you may not choose to move your business out of the country to save on taxes, you certainly should look at these three Tax Laws to save your business money and keep more cash in your pocket.
- Buy new stuff now: If you purchase new equipment for your business prior to the end of the year, there is a nice little tax law that allows business owners to immediately write off the purchase of that equipment versus having to write if off over time. This law can save you immediate tax dollars. If your business needs new equipment such as trucks, new systems, and or new machinery consider getting it now. Your wallet will thank you come April 15th.
- Use your family: Hire a family member in your business and split income. By hiring a family member, he or she now has separate income to report and your business gets a tax deduction for the wages paid. You may also qualify for a group medical plan and other group benefits. If your family members are your only employees you may want to consider a great retirement plan that allows you a tax deduction for the entire family. This is a great corporate tax strategy I personally use to lower my overall corporate income taxes legally. If you look at my payroll, there are few last names listed as Dennis.
- Consider a separate entity: Having an additional corporation might be exactly the answer to lowering your income taxes. Many companies create second corporations or subsidiaries to be able to shift income from one corporation to the other legally to lower income taxes. The second corporation may hold the assets that the first company may pay the second company to use. Having the right corporate structure to lower and defer income taxes has been a corporate tax strategy since the beginning of time. It affords you, the business owner, the opportunity to hold on to its cash for as long as possible.
Do you need help taking advantage of these tips? Call us at (800) 878-4051.
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