<p class="p1">Most of the entrepreneurs don&#8217;t realize that their share of business profits come only after the tax dues are paid off. Until, of course, it is already time for filing the tax return.</p>
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<p class="p1">You know, “a stitch in time saves nine”. If you can make some clever and timely tax-saving decisions, you can indeed celebrate the success of your startup with most of the profits safe in your pockets.</p>
<p class="p1">Interested? Then read on for these 10 quick tips for your ultimate tax-savings strategy.</p>
<p><b></b><span class="s1"><b>1. Get incorporated</b></span></p>
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<p class="p1">As a sole proprietor, you will get taxed for your personal income as well as business profits. But if you get your startup incorporated as an<a href="https://www.forbes.com/sites/allbusiness/2019/11/14/s-corporation-election-right-for-my-business/%236076b1387d4f"> <span class="s2">S-corp</span></a>, you don&#8217;t need to pay tax on corporate income. Your tax liability is limited to the remuneration you receive from the corporation. Making the transition to an S-corp is a convenient tax saving strategy.</p>
<p><b></b><span class="s1"><b>2. Home office deductions</b></span></p>
<p class="p1">If your place of business qualifies as a home office, you could make significant savings on the taxes. You are allowed to deduct some costs including rent and portion of the utilities associated with the business. However, there are some checks under the taxation laws to prevent misuse of this legal provision. In case of any doubt, it&#8217;s advisable to check with a<a href="https://klasing-associates.com/tax-attorney/"> <span class="s2">tax lawyer</span></a>.</p>
<p><b></b><span class="s1"><b>3. Deductions for R&;D expenses</b></span></p>
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<p class="p1">Is this the first year of your startup? You probably invested heavily in research and development. The good news is that you may be able to save taxes through <a href="https://boastcapital.com/rd-tax-credit-faq/">R&;D tax credit</a> by getting a deduction for these expenses. This is an incentive for promoting businesses that contribute to scientific research and innovation.</p>
<p><b></b><span class="s1"><b>4. Business development expenses</b></span></p>
<p class="p1">You may have made tours and run errands for business development or client acquisition. You are allowed to deduct genuine expenses related to business. These include legitimate business travels, client meetings and meal appointments. If you managed to salvage the tickets and receipts for such expenditure, you can save some bucks on your tax return.</p>
<p><b></b><span class="s1"><b>5. Vehicle and Equipment depreciation costs</b></span></p>
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<p class="p1">Startups can take advantage of deductions allowed on under<a href="https://www.nationalfunding.com/blog/bonus-depreciation-section-179-difference/"> <span class="s2">depreciation costs</span></a> for major assets purchased for business use. For example, under section 179 you can claim the entire cost of purchase of certain machines, equipment, vehicles and even real-estate, up to one million dollars. You may also benefit from a tax break under the bonus depreciation provisions.</p>
<p><b></b><span class="s1"><b>6. General Business Tax credits</b></span></p>
<p class="p1">There is a comprehensive list of business activities under the<a href="https://www.irs.gov/businesses/small-businesses-self-employed/business-tax-credits"> <span class="s2">General Business Credit</span></a> which confer the advantage of<a href="https://www.expatustax.com/foreign-tax-credit/"> tax credits</a>. These tax credits are aimed at promoting socially responsible business efforts like health benefits for staff, disabled accessibility, targeted work opportunity, investments for energy conservation and reforestation, etc. Make sure you figure out all the credits your business is eligible for before you file the tax return this year.</p>
<p><b></b><span class="s1"><b>7. Insurance</b></span></p>
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<p class="p1">Deductions for any insurance or risk coverage premiums paid by a business entity can contribute to considerable tax advantages. There are some insurance tax breaks that business owners may overlook. For example, in the case of a home office scenario, businesses can claim a portion of home insurance for the deduction. Don&#8217;t ignore any premium costs related to the business, when you file your tax return.</p>
<p><b></b><span class="s1"><b>8. Freelancers&#8217; checks</b></span></p>
<p class="p1">There is much controversy over businesses avoiding payroll taxing by treating their salaried staff as independent contractors. However, if your startup genuinely hires freelancers, you can claim their paychecks as business expenses. The business should have a proper contractual agreement with a freelancer. Don&#8217;t forget to file a 1099-MISC form in respect of any freelancing payments.</p>
<p><b></b><span class="s1"><b>9. Bad debts, written off</b></span></p>
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<p class="p1">At the end of the year, you may realize that there are a few people who still owe to your business. If the customer appears to be no longer active or goes untraceable, there&#8217;s hardly any chance you&#8217;re getting back any of the hard cash. You&#8217;re allowed to write-off these debts as bad debts and deduct them from your taxable income.</p>
<p class="p1"><b>10. </b><span class="s1"><b>Retirement plan</b></span></p>
<p class="p1">As a founder of a flourishing startup, you may have put off your retirement plans until some years closer to retirement. But you should be investing in a recognized retirement plan as early as right now. At least, if you want to save on some income tax payments, you should claim deductions for contributions to pension plans and other retirement benefits.</p>
<p class="p1">After all legitimate deductions, if your taxable income falls below the prescribed thresholds, you become eligible for further<a href="https://www.latimes.com/business/la-fi-pass-through-tax-rules-20190118-story.html"> <span class="s2">pass-through deduction of 20%</span></a>.</p>
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<p class="p1">Now, that&#8217;s not just tax-saving strategy, that&#8217;s master tax planning!</p>

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