How Tax Planning Can Significantly Reduce Expenses

Earlier this month we told you all about The Surprising Link Between Workplace Efficiency And Your Budget, and last week we taught you How To Negotiate Contracts Like a Ninja. It’s time now for us to talk about one of our absolute favorite expense-reducing strategies—tax planning!

If you do your own taxes or if you hire someone to help that isn’t a Certified Tax Coach, chances are, you’re not taking advantage of the countless perfectly legal ways to make the tax code work in your favor.  It’s a complicated topic and something that changes every year, which is exactly why you really need someone that stays on top of this stuff to help you. If that sounds like something you want to take advantage of, click here to find a Certified Tax Coach.

In the meantime, we’ll share 10 surprising tax deductions just to get you started:

  • Own or buy real estate in poor condition? Make it your primary residence in between the time you buy, fix and flip it and you can avoid taxes on capital gains of up to $250,000 on a primary residence ($500,000 for married couples.)
  • Got a 401(K)? In 2015, taxpayers could contribute up to $18,000 to their 401(k) plan. If you were one of the people that fell in the 25% tax bracket you had the opportunity to save $4,500 on your tax bill by contributing the maximum allowable amount.
  • Use your home office to meet with clients? You can deduct lawn care and landscaping expenses!
  • Have employees (you might be the only one!) that use gym equipment on the business premises? You can deduct the cost of that!
  • Need to provide access to people with disabilities? If you own a small business with fewer than 30 full-time employees and less than $1 million in annual sales, you qualify for a tax credit for expenses involved in providing access to people with disabilities.
  • Sending flowers to a client? You can deduct it when the gift is valued at $25 or less.
  • Need to hire help? If you hire a veteran, you’ll be able to take a sweet deduction—especially if the veteran was unemployed for a substantial amount of time prior to working of you.
  • Have medical expenses related to physical, psychological and emotional disorders? You can deduct them!
  • Need breast augmentation after a mastectomy? That’s deductible!
  • Got kids? Hire them if they’re at least 7 years old! In exchange for their work (yes, emptying the trash cans and licking envelopes counts) each child can earn up to $6,300 per year on a tax-free basis for services rendered. Consider it college funding!

There really are many tax laws and loopholes that small businesses can take advantage of. To learn more, consider picking up a copy of our books, “You Can Deduct That?” and “Tax Breaks of the Rich and Famous” or find a Certified Tax Coach near you that can handle all of it for you.

Next week we’ll wrap up this series on cost reductions by taking a good look at how technology can help you lower your business expenses even further. Be sure to come back to learn more!

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