No one likes to think about taxes, but you can’t afford to ignore them if you’re opening a small business. If you’ve never been your own boss, you might be surprised at the differences in the way taxes work for entrepreneurs. Don’t let tax liability take you unawares. Get informed and factor taxes into your business plan from the beginning.
Here are some key elements of small business tax planning that you need to know before going into business for yourself.
Choose Your Structure Wisely
How you choose to set up your business will have a huge impact on the way taxes are calculated, how they are paid, and how much you will owe. The different business entities, including sole proprietorship, LLC, C corporation, S corporation and more can seem like alphabet soup if you’re just starting out, but the expert team at Numbers House can help you pick the right one for your unique business needs.
If you’re going to have employees, you need to plan for the multitude of payroll taxes, including unemployment insurance, Social Security, workers’ compensation and withholding taxes. Understand worker classification and how it impacts your tax bill. For example, using contract labor instead of employees can reduce your employment tax bill, but be sure to check with the IRS and your state for the correct definition of a contractor. A mistake here could land you in hot water.
Know Your Deductions
There are many ways to lower your tax burden as a small business owner. With careful short-term and long-term planning, you can make smart choices that will lower your tax burden. Numbers House experts can help you find the right deductions for your situation and implement them from the beginning.
We know your expertise is not the tax code. It’s running your business and seeing your dreams realized. If you put Numbers House expertise to work for you, we’ll take the guesswork out of starting a small business and give you peace of mind about your tax bill. Call Numbers House at (865) 294-7300 or contact us online to find out more.