Take Advantage of Tax Rules and Reduce Your Tax Liability
E-Myth Worldwide is a leader in coaching small businesses to make smart choices. E-Myth contributors Erin Duckhorn and Wendy Vinson are on hand with 5 tips to reduce your small business' tax liability.
Robby Reynolds, a tax and business expert and President of The Business Consulting Group in Shelby, North Carolina, joins Wendy Vinson to talk about how small businesses can legally reduce tax liability by taking advantage of certain tax rules.
Summary of Robby's Small Business Tax Advice
- Start tax planning at least six months before the end of the year. Why? Your tax return has the potential to make money through careful management with a tax professional.
- Strategize your tax professional about how to record your business transactions to take full advantage of the tax rules. You can significantly lower your liability this way.
- Certain types of businesses can pay bills late in December to create additional deductions this year as opposed to next year. Delaying receiving or generating income can serve the same purpose.
- If you need to buy equipment, you can elect to write it off in one year instead of depreciating it over three or more years. This can apply to purchases up to $250,000!
- Did you know that a family member can make $5,000 before they have to report or pay federal income tax? If you're a sole proprietor in the 25% tax bracket and you pay your working-age child a reasonable salary for services rendered (let's say $5,000) than you could potentially save about $1,200 on your tax return.
-Erin Duckhorn, E-Myth Blog, March 4th, 2009
Want to learn more about tax rules for your small business?
Click here and listen to Wendy and Robby's podcast
------------------------------------------------------- How to Grow Your Business in a Recession: The 3 Key Areas to Invest Amidst the gloom and doom, savvy business owners are positioning themselves for the inevitable economic recovery. As clients cut back, sales cycles get longer, and revenues fall, the temptation is great to scale back dramatically on your marketing, sales and customer service efforts. After all, the phone may be ringing less, clients are spending less and it's tough to absorb the ongoing costs of
maketing, sales and service. And that's exactly why now is the time to hold firm and even expand. Time and again studies have show that businesses that maintain or expand their marketing and customer service during an economic slowdown gain market share and emerge stronger when a recession ends. That's not to say you should necessarily spend willy nilly. However, there are three key areas of your business in which you can invest now to catapult yourself to the next level during the
recovery. Marketing For many businesses, the marketing budget is the first to be cut during tough times. The reality, however, is that such a move only exacerbates the pain. The dollars you invest in marketing and advertising today are what is going to drive your success in a few months. During a slowdown, demand does not necessarily disappear, but sales cycles lengthen as gratification is postponed. As your competitors cut their budget, just holding steady will gain you a larger share of voice in your chosen medium and in the mind of your customers. To really push the envelope, use this opportunity to snap up premuim ad positions previously held by competitors, or to test out new marketing concepts you've had on the back burner. You probably have a little more time to devote to them now. Customer Service
Another powerful strategy for capitalizing on an economic downturn is to step‐up your customer service. You may be doing less business, but that makes each potential and existing client that much more valuable. Leaving your customers to navigate a maze of touch‐tone options, or greeting them with your voicemail box may save a few dollars in the short‐run, but could be costly down the road. Systems One additional area to focus on during a downturn are your sales and service systems. If you don't have a system for assisting customers in‐person or by phone, now is the time to create one. If you have been using a sales and service system, you may want to reevaluate and improve upon it. Giving customers a consistent, polished, professional experience when they contact your business inspires confidence. The more confident customers
feel about your business (especially during hard times), the more likely they are to spend their hard‐earned dollars with your firm. Appearing confident when not many others do lends credibility to your company. While it can be difficult and frustrating to weather an economic slowdown, investing in the right areas of your business is likely to produce good returns as the economy recovers and the pent up demand for goods and services is unleashed. -
Victor Mataraso, Ezine.com, March 2009
Victor Mataraso, M.B.A is the founder of Reliable Receptionist, a company providing off-site telephone reception and appointment scheduling services. He can be reached at 925-627-4200 or www.ReliableReceptionist.com.------------------------------------------------------- Receive a Free Gift from ServiceCEO! Want to receive a free iPod Nano, or a $500 Home Depot Gift Card? These are just two of the many gifts you can receive by referring a friend to ServiceCEO. If you have a friend or colleague who would benefit from ServiceCEO, visit the link below to introduce them to us! Simply select the gift options that you would enjoy, then enter your information and your friend's information to participate. If your friend purchases a ServiceCEO
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