Save Money on Taxes
By Lois Kirkpatrick
The time to save money on taxes is before April 15. In fact, it’s before December 31. Here are two key things small business owners can do over the next seven weeks that can reduce the amount of taxes you’ll owe next spring.
1. Reduce Your Income. Give your customers a holiday gift by extending the due date on their invoices to January 2015. That will reduce the amount of revenue you earn in 2014, and what you earn in 2015 won’t be taxed until 2016.
2. Increase Your Giving. According to the U.S. Small Business Administration, about 75 percent of small companies give around 6 percent of their profits to charity each year. In addition to being a tax deduction, corporate philanthropy strengthens the nation as a whole.
However, you have to be careful about which charity you choose. Con artists ramp up their efforts around the holidays, and it’s easy to become a victim of fraud. Here are some things to keep in mind:
- Never donate cash; always keep a paper trail in case you’re audited.
- Never respond to a phone call or email solicitation; contact charities yourself.
- Check with the state of Virginia, the IRS and/or the Better Business Bureau to make sure the charity you’ve chosen is legitimate.
Be strategic about your donations. Choose a charity that supports your company’s mission. For example, if you make a homework app, think about giving to a school or library foundation. If you’re a defense contractor, consider donating to an organization for veterans or military families.