3 Ways to Reduce Your Business Tax Liability
Episode 41: In this episode, Timalyn talks specifically to business owners. There’s a possibility that you either owe taxes now, or that you will owe them in the future. As a person whose focus is on achieving your business goals, let’s assume you’ve hit your income goal for the year. As you begin to pull together your information, you suddenly realize you owe taxes. Maybe you actually owe more this year than you did last year. Are you beginning to worry that the more you make, the more you’ll owe? Timalyn will provide 3 ways to reduce your business tax liability.
Timalyn begins by setting up a scenario many business owners are familiar with, because a tax liability can cause a lot of stress and even throw you off of your game. But, it doesn’t have to be that way.
Tip #1: Be Proactive
Let’s not worry about issues in the past. This is about moving forward by taking proactive steps to reduce your tax liability by investing in your business. You do this by hiring experts. Timalyn comments that she receives the best return on her investment when she invests in herself. The same is true for investing in your business.
On September 18, 2023, Timalyn launched the Tax Pro Representation Journey. This is to help other tax professionals. When you invest in an industry expert to help you in your business, the return on that investment should be at least 2 to 3 times what it cost you. As an example, 75% of the tax professionals in Timalyn’s program brought in new clients within 3 weeks of beginning her program. It’s a perfect example of how investing in yourself, as a business owner, can have a significant impact on your progress.
Tip #2: Consider Hiring Financial Experts
Having another set of eyes on the situation can be a big benefit. But what type of financial expert should you consider hiring?
The Value of a Bookkeeper / Accountant
In Episode 16, Timalyn discussed, “How to Choose a Tax Professional.” The same steps apply to hiring a bookkeeper. The bookkeeper is managing historical data. In other words, when and where you spent money. Remember, the fees you pay your bookkeeper are also tax deductible.
The value of tracking the historical data is that it enables you to make income projections. Trend data is a good way to make projections about your specific business. You can also consider how you are performing relative to your industry.
The data will also highlight areas of weakness you may need to address. You may notice certain expenses are unusually high. By knowing your numbers, you’ll have better insight into how your business is performing. This is especially important when a problem exists. Once you uncover it, you can develop a plan to effectively deal with it, much earlier than if you’d simply waited until the end of the year.
A bookkeeper can also highlight areas of opportunity. For example, you may be able to outsource an activity. Knowing your numbers enables you to make an informed decision as to whether you can afford to outsource and/or hire.
Tip #3: Consider Investing in a Tax Plan
Tax preparation is not the same as tax planning. You should expect to pay an additional fee for tax planning services. Tax planning is specific to you and your business. You’ll have customized strategies designed to help you. However, not all tax professionals are tax planning experts. While Timalyn can do tax planning, she specializes in tax relief and she’d refer you to a trusted colleague for tax planning services.
Timalyn will be posting more information about reducing your tax liability on her blog, Tax Tips with Timalyn. She’ll also be launching a video series on her YouTube channel. Be sure to subscribe to both of these free resources.
Please consider sharing this episode with your friends and family. This information may be helpful to someone who really needs it. After all, back taxes shouldn’t ruin their life either.
As we conclude Episode 41, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, Google Podcasts, and many other podcast platforms.
Remember, Timalyn Bowens is America’s Favorite EA and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode.
For more information about tax relief options, visit https://www.Bowenstaxsolutions.com/ .
If you have any feedback, or suggestions for an upcoming episode topic, please submit them here: https://www.americasfavoriteea.com/contact.
Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.