Can I Survive All These Business Taxes?

One of the disadvantages of running a small business is the high cost you'll pay in taxes, that is, if not done properly.

Small businesses, though, do have one advantage that those who work for a corporation do not - they have the opportunity to write off a lot of business expenses.

Here are 10 ways in which you can save on your small business taxes:

• Donate to your favorite charity… Save the receipt - this is tax deductible.

• Know your deductions… Keep track of everything you purchase and know what you can and can't write off. Even going to dinner with friends can be tax deductible if you talked business. Save the receipts!

• Know your credits…Tax credits are different from tax deductions. Deductions lower your taxable income whereas credits directly affect the amount of your refund or the amount in which you owe. Examples of tax credits include using energy-efficient lights, solar panels or appliances, health care, providing daycare services for employees and research.

• Offer employees benefits instead of bonuses… You pay taxes on bonuses, so consider offering your employees benefits such as working from home one day per week (if possible), letting them choose their own hours or allowing them to wear jeans on Fridays (assuming the dress code is otherwise formal). Or, you can simply pay more towards their medical benefits instead of giving them a raise or monetary bonus.

• Consider hiring a CPA… Whether you do your taxes on your own or hire someone, it's pertinent that you keep track of everything. Set up a file system to categorize all of your receipts, keep track of mileage and expenses (such as gas and maintenance) on your car and use a spreadsheet to track general income and expenses of your business. As you can imagine, filing your taxes can be confusing and you don't want to miss anything. It might be worth it to spend a little money on a CPA and get a greater return. Plus, a professional can back you up if you were to get audited - whereas a computer program cannot.

• Save for retirement… Money contributed to a retirement account is tax deductible. You can also save money if you provide retirement accounts for your employees.

• Hire your spouse… If you hire your spouse, you can offer them healthcare benefits - meaning you will get health care benefits. These payments are also deductible.

• Keep track of customers who don't pay… Someone didn't pay you for your services? This can be written off on your taxes as a loss and save you money.

• Take a class.. If you take a class or attend school in order to help better your business, you can write it off as an expense. You can also write off the gas and mileage it takes to get you to and from your class.

• Don't forget about your home office… If you work from home, even occasionally, this can save you money. Working from home allows you to be able to write off part of your mortgage, utility bills and internet and phone bills. Make sure to keep track of how often you're working from home.