Any tips? We have what I think are a good group of accountants doing our books and taxes, and yet beyond basic business expenses (computers, attending a conference to sell our stuff, cell phone bill, etc...) we're pretty much paying a TON of taxes.
Maybe that's all there is, but if you have any advice, I would be very interested in hearing it. (devon@digitalsanctuary.com)
Fair warning: I am not an accountant, the below information is just from my own experiences and does not constitute professional advice. Talk to an accountant.
The biggest one is expensing things you'd have to pay for anyway (e.g. health club memberships [if applicable], insurance, cell phones, health savings account, home internet & computers [if you work at home enough], parking passes, subway cards, business mileage on your cars and lumping personal trips & business trips together [careful with this one]. These take advantage of pretax dollars. I encourage you to do same for your employees since you're offering real perks with pretax dollars. Just make sure you talk to your accountant first
If you operate on a cash-basis (as opposed to an accrual basis) make any capital improvements/major purchases at the end of the quarter or fiscal year instead of the beginning of the next quarter or fiscal year. You can get around some of the 401k limitations if you own your own business. Finally, sometimes it's cheaper, in a tax sense to issue dividends to yourself and fellow equity holders. All of this varies significantly by legal formation and state.
Finally - and I can't emphasize this enough - invest in a good accountant. There's so many write-offs & tricks that the average person would never even think of and the laws, in typical US fashion, are filled with red tape & loop holes. Having someone to help you navigate them is crucial.
