7 Tax Deduction Tips for Small Business Owners:

7 Tax Deduction Tips for Small Business Owners:

I recently heard a keynote on tax advice for small business owners. This list was too good not to share. And as a disclaimer/disclosure, these are just my notes. Please do not construe this as tax advice and do your own research.

The Augusta Rule: This rule allows you to hold parties or events at your house, pay yourself for them, and take deductions for associated expenses without claiming the income.

HSA Plan (Health Savings Account): A high deductible health plan can be paired with an HSA, which offers tax advantages. Contributions to an HSA are tax-deductible, and withdrawals used for qualified medical expenses are tax-free.

Hire Your Kids: Small business owners may be able to employ their children and pay them a reasonable wage. This strategy can have tax benefits, including potential deductions for the business and the opportunity for the children to contribute to a Roth IRA.

QREP (Qualified Real Estate Professionals): Qualified real estate professionals may be able to offset certain "losses" like depreciation against other taxable income, potentially reducing their overall tax burden.

ERC (Employee Retention Tax Credit): This tax credit was introduced to support employers during the COVID-19 pandemic. It provides incentives for eligible employers who retain employees during certain qualifying periods.

Crypto Tax Loss Harvesting: Cryptocurrency investments may offer the opportunity for tax loss harvesting, which involves selling losing investments to offset gains and reduce taxable income.

QBI (Qualified Business Income) Deduction: This deduction was introduced as part of the Tax Cuts and Jobs Act in 2017. It allows certain business owners to deduct up to 20% of their qualified business income.