That time of year is finally starting to roll around again, and if you are like a lot of people. That means additional stress, anxiety, and work to get your tax situation squared away in time. Taxes are always a pain, but particularly for sole-proprietors and business owners everywhere, since there are a lot more moving pieces to stay on top of. But with the right know-how, you can get the best tax return possible, even on a short notice. Here are three last minute tips that can save your solo business hugely in taxes this tax season.
Find Extra Deductions
The first last minute tip that can save your solo business in taxes is to dedicate a lot of time to finding all the possible deductions that you qualify for. As a solo business owner, you almost certainly want to avoid taking the standard deduction and instead go for an individual approach, since many business tax deductions are not included in the standard deductions. You can deduct pretty much any expense you spend to run your business, so that you are truly only taxed on your business profit, not your gross sales or income.
Contribute to a Retirement Plan
Another great tip that you can use to save your solo business in taxes at the last minute is to make sure that you have contributed to a retirement plan. If you haven’t maxed out your solo 401-k or your Roth or traditional IRA, there is still time. Some plans let you make a contribution by April 15, or the tax filing deadline. Depending on your plan, you can either deduct your contributions and pay tax on them when you receive payments in retirement, which can save you a huge amount on your taxes this season.
Sell Losing Investments
The final tip that can help you save taxes on your solo business at the last minute is selling your losing investments to offset your income. Once you have sold investments that have caused you a loss this year, you can count that against your income, effectively decreasing your taxable income. You can then reinvest that money right away and decrease your taxable income. This is a strategy best handled by a professional so that you don’t end up making a mistake that costs you investment gains over time.
Taxes are never fun for anyone. But for sole proprietors, taxes can be truly overwhelming. Make sure that you are taking advantage of these three tips to decrease your tax bills last minute as a solo business owner for the easiest tax season possible.
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