As we hit the halfway mark of the year, it’s essential for small business owners to do a tax check-in. With tax season still months away, now is the perfect time to review your financials and make adjustments to reduce your tax liability come tax time. Here are a few key actions you should take:
Track Your Deductions
Ensure you’re keeping up with deductible expenses such as business-related travel, supplies, and home office costs. It’s easier to track these now than scrambling later.
Review Estimated Tax Payments
If you're paying quarterly taxes, now is the time to review whether your estimates need to be adjusted based on your current income.
Contribute to Retirement Plans
Take advantage of retirement accounts like SEP IRAs or Solo 401(k)s to reduce taxable income while saving for the future.
Consider Tax Credits
Look into any tax credits that apply to your business. From energy-efficient upgrades to employee retention credits, credits directly reduce your tax bill.
By reviewing your tax strategy in July, you’ll be better prepared for a smoother, less stressful filing come April.
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