Unlocking the Power of Proactive Tax Planning for Small Businesses and the Self-Employed Taxes

I know, I know I see your eyes rolling! I get it. Most people hate talking about taxes, but it’s something we can’t get away from. I love this quote from Morgan Stanley, “You must pay taxes. But there’s no law that says you gotta leave a tip.”

Why bring up this quote? Well, here’s the thing –  millions of people are leaving the IRS a fat tip and not even knowing it. Small businesses get blindsided and end up with massive tax bills and don’t even understand why. One of the reasons I see is that people are treating taxes like it is a seasonal thing and it’s not.

How many of us are leaving the IRS a HUGE tip? I’ve seen firsthand how often business owners are unknowingly overpaying the IRS. Especially those who are self-employed! If you aren’t getting assistance all year long, then you’re more than likely leaving the IRS a huge tip each year (and not realizing that taxes are something that should be worked on all year long).

Okay, well how do I stop leaving the IRS a tip every year? And what’s the best way to reduce my taxes? My first question is, “Are your financials up to date?” Can I look at your P and L or income statement and see where your business stands today so I can help?

Most tell me no, not really. Well, that is the first step. How do we help if we have no idea where you stand financially? We can’t. 

Here is the thing, up-to-date financials make tax planning and tax preparation easier and sets you up for:

1. Less Stress. Keeping your financial records in order makes tax season easier to handle. When everything is organized and up to date, you can do your taxes with confidence, and it won’t be as overwhelming.
2. Better Money Plans. Having current financial information helps you make smarter long-term money plans. This includes things like planning for retirement, deciding how to invest your money, and managing any debts you have. These plans can also impact how much you owe in taxes over time.
3. Smarter Tax Moves. Up-to-date financial records don’t just help you pay less in taxes, they also help you make better tax decisions. You can explore advanced ways to save on taxes, like making tax-efficient investments, giving to charity, or planning your estate. These strategies reduce your tax bill while you work toward your financial goals.

Now that you see the benefits of having up to date financials the world can open up to you when it comes to tax planning because you are ready.

Tax planning/Tax advisory/Tax Strategies is a year-round process not just a January to April season, where strategies and plans are created and used to Helps you reduce the amount of taxes you pay by legally taking full benefit of all available deductions and credits so that you are not overpaying in taxes.

Tax planning isn’t a transaction, it is an ongoing relationship with your taxes and your tax professional.

I am a firm believer that proactive tax planning is the key to keeping more of your hard-earned money in your pocket.

I say this because that’s how the wealthy who have businesses stay wealthy; they implement strategies all year long so they can pay the least amount of taxes LEGALLY possible. Written in the tax code are lots of options for people with businesses and real estate to help lower their taxes. Believe it or not, the government’s incentive is for you to flourish as you add value to the economy. Amazon and Netflix are 2 great examples of companies that know how to take advantage of all the legitimate deductions, credits, and strategies the tax code offers.

You might think they are cheating the system, but they are actually just using the system every possible way they can.
All those deductions, credits, and strategies are also available to you and your business.

Working with the right tax professional can and will show you things written in the code that could save you thousands of dollars.

Some of the strategies out there are:
1. Hiring your children where you can pay up to $13,850 a year.
2. Starting your own company retirement plan.
3. Putting yourself on payroll so you can eliminate some of those self-employment taxes.
4. Using the mileage deduction in a way that gets you the higher write off.
5. Your health insurance premiums.
6. Changing the way your business is taxed.

These are just a few strategies that can help you save on taxes. There are so many possibilities! Remember that it’s not too late to save. Do you really want to miss out? Your loss is the IRS’s gain!

The most expensive mistake a business owner can make is failing to plan. I’m sure you hear this a lot in other areas of your business. Guess what? It also applies to your taxes.

When it comes to taxes, it isn’t about how much you make. It’s really about どうやって you make it that helps determine how you are taxed, which is why tax planning is so important.

Now that you know what’s possible, you can’t unknow it. So, get started on finding help you need so you can stick to paying your fair share in taxes, maximize on all the tax savings entitled to you and your business, and win.

Remember, success in business is not a matter of luck or chance, but rather a result of taking action.

Here’s to taking the anxiety out of taxes,

サンドラ・モーノ, Tax Strategist

About Sandra Morno, Tax Strategist and IRS Enrolled Agent