3 Overlooked Tax Breaks Your Accountant Isn’t Telling You About

I’m sure your accountant is great, no offense to the hardworking people in that profession but they don’t always have the time to help your small business significantly minimize your tax burden. I learned firsthand that using only an Accountant was costing me money…big money!

I finally “bit the bullet” and hired a “Tax Strategist” to do my accounting and he dropped my tax bill by over 30%! I also learned a ton of helpful information to save more the following year (I’d be happy to share his info if you want to send me an email). Combine a good Tax strategist with an amazing bookkeeping service like our friends at Karihub.com and you’ll be saving money in no time.

So, let’s take a quick look at 3 items that you might not be aware of but that could be saving you on your tax bill.

Category 1: Health and Wellness

Many small business owners don’t realize that certain personal health care or self-care expenses can be deducted from their taxable wages. Did you work while on your family vacation last year? Do you go to the gym, do yoga, get massages, float pods (it’s a thing) or any other stress-relieving activities? An effective Tax strategist/Bookkeeper will be able to help you code every transaction correctly and help you maximize this deduction.

Category 2: Owner’s Draw versus Salary

Using “Owner’s Draw” correctly can result in significant tax savings if your company is structured in a way that enables you to take both Salary and Owner’s Draw.  The biggest reason is that you don’t have to pay payroll taxes on Owner’s Draw, only income taxes which saves you more than 15% on every single dollar. Again, be sure to consult a good Tax strategist to maximize the impact and a good payroll/bookkeeper to record it all correctly.

Category 3: Training & Advertising

As a small business owner, you are constantly taking people out to lunch, coffee, happy hour, etc.  Many small business owners mistakenly code all of their meals to a “meals & entertainment” expense code.  Often a personal accountant will not include this expense code on your list of deductible items on your personal taxes. However, many of your meals and beverages could be expenses to a “training” or “advertising” expense line and therefore applied as a tax deduction. How do you know when to do this? I think I’ve made it obvious by now.

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