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In this troubled economy, everyone is looking for different ways that they can save money, and when April 15 th comes around, taxes are no exception. People everywhere are seeking accounting advice to figure out everything from itemization wizardry to part time business and health insurance premium deductions. Luckily there are many ways that you can save money on your taxes, so here are a few helpful tips for holding on in stormy weather:
Know where you are spending your money. Most people do not take full advantage of their business expenses. Take a closer look at the things you have been purchasing and try to figure out what is deductible as a business expense and what is not. Your cell phone bill, for example, should be a no-brainer deduction (providing that you haven’t been accumulating too many overage charges for personal use)
Avoid making estimated tax payments. One of the benefits of being a sole proprietor is the ability to find every nook and cranny and reap the benefit of the savings. There’s no point in letting the IRS do the work for you. Figure out a sound strategy to itemize, and make the necessary part time business and health insurance premium deductions that you can fit in to your return.
Earn money through the most tax-advantaged way. One of the things you want to figure out when you form your business is what kind of business structure is going to provide you with the most leniency for your industry. For example, is your business income active or passive? Active businesses will benefit more from C- or S-corp structures while passive income businesses benefit more from LLC’s.