Welcome back, savvy small business owners! If you thought the first five tax moves we covered last week were exciting, buckle up because we’re about to take your tax strategy to the next level. In Part 1, we explored supercharging your retirement accounts, making the most of Section 179 deductions, turning your home office into a tax haven, becoming a charitable giving ninja, and wining and dining for Uncle Sam. If you missed it, go back and get the goods!

This week, we’re diving into five more game-changing tax moves that will have you looking at your business finances in a whole new light. From giving your business structure a makeover to conquering estimated tax payments, these strategies are designed to help you finish 2024 strong and set you up for success in the years to come. So, grab your favorite caffeinated beverage, settle into your tax-deductible office chair, and let’s explore the final five moves that could transform your small business’s financial future.

Moreover, I wouldn’t be a lawyer if I didn’t give you a disclaimer (or use the word “moreover”): this article contains general information for small business owners and is not tax or legal advice. Always consult an expert who can determine which tax strategies are best for your business and ensure you implement them correctly. In fact, if you don’t have a relationship with a CPA whom you can count on come October when you’re making your tax projections, now is the time! You’ll also want a bookkeeper if you don’t have one already. Your bookkeeper will keep your books reconciled and categorized each month, so you’ll be ready when October rolls around. Read to the end, and I’ll show you how to get advice and counsel that’s suited for you.

And with that, let’s get started!

Move No. 6: Give Your Business Structure a Makeover

Is your business structure so last season? It might be time for a corporate facelift. For instance, it may be time to switch from a sole proprietorship to an S corp. As an S corp, you can potentially reduce your self-employment tax by paying yourself a reasonable salary and taking the rest of your profits as distributions. It’s like cutting your tax bill in half – legally though.

But remember, “reasonable” is the keyword here. If you try to pay yourself $1 a year and take the rest as distributions, the IRS might raise an eyebrow. Or two. Or call for a full-blown audit. So be smart, be reasonable, and work with a professional. As a LIFTed Business Advisor, I can help. Read on to find out how to book a complimentary consult call and learn more.

Move No. 7: Be a Health Care Hero With an HRA

Want to be the coolest boss ever while also saving on taxes? Implement a Health Reimbursement Arrangement (HRA). It’s like giving your employees a health care allowance, except it’s tax-free for them and tax-deductible for you. Win-win!

There are different types of HRAs to choose from. There’s the Qualified Small Employer HRA (QSEHRA – gosh that’s a mouthful) for businesses with fewer than 50 full-time employees, and the Individual Coverage HRA (ICHRA) which has no size limits. Make sure you have clarity on the best option for your business by consulting with a professional.

And here’s a bonus: HRAs can help you attract and retain top talent without breaking the bank on group health insurance. You’re welcome.

Move No. 8: Market Like Mad

While you’re spending money to make more money (also known as “marketing”), this is your reminder that you can deduct those expenses. So amp up your marketing efforts in the latter half of 2024 and watch those deductions roll in.

Redesign your website, plaster your logo on some pens, or sponsor the local Little League team if you like. Host a webinar, start a podcast, or create a viral TikTok dance challenge about your product (if that’s your thing). The sky’s the limit, and it’s all deductible as long as it’s “ordinary and necessary” for your business.

And here’s a little-known fact: you can deduct the cost of promotional items like t-shirts or mugs as long as they cost $4 or less, have your logo on them, and you distribute them widely. So order those branded fidget spinners. Your customers might forget about them in a week, but your tax deduction will last forever. Or at least until the next tax year.

Move No. 9: Invest in Your Employees’ Brain Power

Investing in your team is always a good idea. Send your team to conferences, subscribe them to online learning platforms, or bring in experts for training sessions. Not only will you have a smarter workforce, but you’ll also have a fatter deduction on your tax return. Plus, your employees will love you for investing in their development.

But wait, there’s more! If you provide educational assistance to your employees for courses not directly related to their current job, you can exclude up to $5,250 of this benefit from each employee’s wages annually under an educational assistance program. So if your marketing manager wants to take an interpretive dance class, you can potentially help them out and get a tax break. Who says the IRS doesn’t have a sense of humor?

And while you’re at it, why not learn something yourself? Any education expenses that maintain or improve skills needed in your current work are deductible, too.

Move No. 10: Master the Art of Estimated Tax Payments

Ah, estimated tax payments – the bane of every small business owner’s existence. But fear not! With a little planning, you can conquer this quarterly beast. Here’s how to do it: predict your income, calculate your tax, and make payments on time. In return, you can avoid paying penalties and create a sense of calm in your nervous system. You get bonus points if you set up a separate savings account for taxes and contribute to it monthly. It’s like a swear jar but for Uncle Sam. And you don’t have to swear (unless you want to).

If you expect to owe $1,000 or more in taxes when you file your return, you generally have to make estimated tax payments. In this case, you’ve got four due dates to look forward to: April 15, June 15, September 15, and January 15. Mark them on your calendar if you haven’t already.

And here’s a little-known trick: if you realize you’ve underpaid, you can increase your withholding on your W-2 (if you have one) towards the end of the year. Withholding is considered to have been paid evenly throughout the year, even if you do it all in December. It’s a little like a “get out of jail free” card, courtesy of the IRS.

Your Mission, Should You Choose to Accept It…

There you have it! Ten tax moves to make between now and New Year’s Day. Now, armed with these 10 tax-saving strategies, go make the second half of 2024 your most financially savvy yet. Your future self (and your accountant) will thank you. And who knows? Maybe next year, you’ll be the one writing witty tax advice articles. Dream big, fellow entrepreneur. Dream big.

The Trusted Advisor Your Business Needs

As your trusted LIFTed Business Advisor, I understand the critical importance of strategic tax planning to maximize your small business’s financial health. Having support and strategies for implementing these tax moves not only helps you save money but also positions your business for long-term success. That’s why I offer a comprehensive LIFT Business Breakthrough Session where we’ll analyze your current business foundations – including your tax strategies – and develop a plan to address any gaps. Together, we’ll ensure that your business is well-equipped to take advantage of these tax-saving opportunities. With my support, you can focus on what you do best—growing your business.

Book a call here to learn more and get started today.

This article is a service of a Personal Family Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices with your business throughout life and in the event of your death. We also offer a LIFT Business Breakthrough Session™, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.