Things You Should Know About Tax Filing Strategies for Small Business Owners

Oct 06, 2022 By Susan Kelly

Determining what federal tax forms you need to submit will depend on the nature of your firm. Specific guidelines for document submission are required for each business organization, including sole proprietorships, partnerships, corporations, S corporations, and limited liability companies (LLCs). When it comes to paying taxes to the state, the regulations that apply to you will be determined in part by the legal form of your company.

Working with a certified public accountant (CPA) or another competent tax expert is reassuring for many owners of small businesses. If you are confident enough to do your taxes, several excellent filing methods may help you get the most out of the credits and deductions available. You will want to be aware of these tactics.

1. Claim the Health Care Tax Credit

It is recommended that you consult with your certified public accountant to determine whether or not you qualify for the health care tax credit, which may result in cost reductions.


If you pay at least 50% of your workers' health insurance premiums and fulfill other conditions, the Small Business Health Care Tax Credit might give a tax credit of up to 50% of your related expenditures. For more information, please consult the government's guidance on the Small Business Health Options Program (SHOP) and other relevant resources.

2. Deduct Certain Property

This deduction, referred to as Section 179 property, may include up to one million dollars worth of qualified company property. Because you may only deduct the entire value when your firm starts utilizing the property, it is a good option for people who have just relocated or business owners who have recently bought new property used for transportation, manufacturing, business, or research.

3. Deduct Charitable Contributions

Contributions to charitable organizations are not deductible as business expenses for sole proprietorships, partnerships, limited liability companies (LLCs), or S corporations; however, the business owner.


Cash donations to organizations that meet specific criteria may qualify for a tax deduction, even for taxpayers who do not itemize their deductions. You are eligible to deduct up to $300 for charitable donations that you make throughout the tax year in cash or checks.

4. Be Aware of All the Different Deductions You Can Take

Deductions can be made for expenses such as business-related travel outside the local area, business-related ATM fees, and even business-related purchases of newspapers.

5. File a claim for the Credit for Work Opportunity

Those who employ veterans, inhabitants of specified areas, beneficiaries of SNAP, and members of other targeted groups may be eligible for this credit, which may be helpful to their tax filing if their company is qualified. SNAP recipients are also eligible for this credit. The credit amount is subject to change, but you are generally eligible to receive up to forty percent of the first six thousand dollars of qualifying earnings given to a new worker who belongs to one of the mentioned categories.


The income tax, the self-employment tax, the taxes on employers, and the excise taxes are the fundamental forms of company taxes levied by the federal government. A helpful Guide to Business Taxes is available from the Internal Revenue Service (IRS), which includes data on these different tax forms.

6. Claim A Credit, If Your Company Pays For Employees' Child Care Expenses

A tax credit may be available to you and your company if you offer to pay for the child care costs of your workers. The credit equals 25% of the expenditures paid, with a yearly cap of $150,000. This may be more excellent tax relief for you than claiming your child tax credit on an individual return, depending on the specifics of your situation.

7. Claim the Pension Plans Startup Cost Credit

There is a possibility that you might be entitled to credit if you have just initiated a pension plan for your workers. To assist small companies in recouping some of the expenses associated with launching a project, it is worth up to $5,000 for each of the plan's first three years.

8. Take a tax deduction for health insurance

If you are self-employed, itemize, have an independent health plan, and pay higher premiums out of your wallet, those insurance costs may be used to modify your revenue. This does not implement group insurance; however, if you have an independent health plan, itemize, and pay higher premiums out of your wallet, this may pertain to you.

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