Attorney Thomas B. Burton discusses some ways small business owners can reduce their taxes after January 1 of the new year, for their taxes owed for the previous year. Attorney Burton discusses steps you can take between January 1 and April 15th to reduce your taxable income as a small business owner.

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As a small business owner, tax time can be a stressful and overwhelming period of the year. However, there are strategies you can implement in order to reduce your taxes and maximize your deductions. While many small businesses focus on tax planning before the end of the calendar year, there are still opportunities to save on taxes after January 1st but before filing in April.

One of the first steps you can take to reduce your taxes is to ensure you are taking advantage of all available deductions and credits. This includes deducting business expenses, such as office supplies, equipment, and travel expenses. Make sure to keep detailed records and receipts of these expenses throughout the year so that you can easily claim them on your tax return.

Another way to reduce your taxes is to maximize your retirement contributions. Small business owners can take advantage of tax-advantaged retirement accounts, such as a SEP IRA or a Solo 401(k). By contributing to these accounts, you can lower your taxable income and save for retirement at the same time.

You may also want to consider investing in your business in order to qualify for tax deductions. This could include upgrading equipment, investing in technology, or hiring new employees. These expenses can often be deducted on your tax return, reducing your taxable income and overall tax liability.

If you are a pass-through entity, such as a sole proprietorship, partnership, or S corporation, you may also be eligible for the Qualified Business Income Deduction (QBID). This deduction allows small business owners to deduct up to 20% of their qualified business income, further reducing their taxable income and overall tax liability.

Lastly, don’t forget to take advantage of any available tax credits. This could include the Small Business Health Care Tax Credit, which provides a credit to small businesses that provide health insurance to their employees. Additionally, there are tax credits available for hiring veterans, investing in energy-efficient equipment, and conducting research and development.

In conclusion, while tax planning before the end of the calendar year is important, there are still opportunities to reduce your taxes after January 1st but before filing in April. By maximizing deductions, contributions to retirement accounts, investing in your business, and taking advantage of available tax credits, small business owners can lower their taxable income and save on taxes. If you are unsure of the best tax strategies for your business, consider consulting with a tax professional to ensure you are taking full advantage of all available opportunities to reduce your tax liability.