Tax planning essentials for small-business owners. Why is it so important? Because tax laws are complex and always changing. And for anything that's not straightforward, there are always people around to offer you 'help.' So there's a lot you can do — legally — to reduce your taxes, increase your cash flow, and boost the profitability of your small business. Here are some ways that savvy business owners trim their tax bills. They ensure compliance with tax laws and avoid potentially disastrous penalties and interest costs. They take full advantage of international accounting standards. They know (somewhat) about 'transfer pricing' and (a lot) about available deductions, credits, and incentives. And they do something (not much) with those 'safe harbors.' And when they can, they engage the assistance of experienced international lawyers. Why? Because tax law is a complex, convoluted, and ever-changing mess.

Core Tax Strategies to Embrace

• Optimize Your Business Structure

  Your business's legal structure affects your taxes. Think about these choices:

• Sole Proprietorship

• Partnership

• Limited Liability Company (LLC)

• S-Corporation

• C-Corporation

  Each option has distinct and unique tax benefits and drawbacks. You would be wise to consult an **international lawyer**  for the best setup for your individual scenario.

Leverage Family Employment

• Employing family members can yield significant tax advantages. Hire kids under 18 and you pay no payroll taxes on their wages, so long as you stay beneath the amount that qualifies for the standard deduction. Employ your spouse and you can take advantage of two income-splitting strategies. With both, the family gets tons of tax-advantaged benefits.

Maximize Retirement Plan Contributions

• Providing tax advantages for both employees and employers is part of the package when it comes to retirement plans. You see, plans like these 401(k)s SEP IRAs SIMPLE IRAs do much more than just provide a means of accumulating a bunch of dough, a way to save for when you ain't punchin' the clock anymore. They also give you the opportunity to lower your taxable income.

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Claim Home Office Deductions

• If a part of your residence is used strictly for business, you might qualify for deductions related to that space. Direct expenses like repairs to that space can be written off. Indirect expenses—such as interest on your mortgage, property taxes, or utilities—might also be partially deductible if they can be reasonably allocated to the space. Consult a lawyer with expertise in international tax matters to make sure you're doing this correctly.

Time Income and Expenses Strategically

• Get your taxable income down to the sweet spot by smartly delaying or rushing to happen now income and expense events:
• If you expect to be in the same or a higher bracket next year, put off as long as you can recognizing income until next year (try for December, if you can), and then recognize it. (In the wild, these two timing pushes are often combined for a full-year effect: delay recognizing half-your-income until next year's tax season, and then do all those self-employed deductions you normally do, if you can, in December.)
• If you're so to say in a much lower bracket this year, and more is the next couple of years, push forward as long as you can recognizing as much deductible expense as you can.