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As Benjamin Franklin famously said, “Nothing is certain except death and taxes.” And no one feels that more strongly than entrepreneurs trying to understand business taxes.
While New York City is among the best places to start and run a business, there‘s no escaping the many tax requirements and costs involved. But by taking advantage of tax deductions and other ways to reduce your taxes, you can keep more of what you earn.
Keep reading for a look at the five best ways to reduce your business taxes in New York City.
1. Operate Tax-Free for 10 Years With START-UP NY
If you’re starting a brand new business in New York City, you may be eligible to participate in the START-UP NY program.
START-UP NY offers tax benefits to eligible businesses located in vacant spaces or on other approved land. The program seeks to promote entrepreneurship and job creation by setting up tax-free communities located all over the state.
2. Receive Tax Credits for Hiring Certain People
Another way to lower small business taxes in New York is by hiring and training certain kinds of people to work in your business.
As your business grows, you’re going to need extra help. Fortunately, New York makes it easy for anyone to expand their business by offering employment-based tax incentives.
By hiring and training veterans, apprentices, or disadvantaged youths, you become eligible for special tax credits. This means you can expand your workforce without breaking the bank.
3. Get Tax Credits as a Manufacturer
Manufacturers in New York can save money by taking advantage of tax credits available only to them.
There are many different types of tax credits that your manufacturing business may qualify for, depending on what it produces. You can even claim state tax deductions on your business’s property investment portfolio.
4. Employ a Family Member
While this option isn’t exclusive to New York-based businesses, you can save on federal taxes by employing one of your family members.
The IRS offers multiple options for sheltering income from taxes by employing members of your family. You can eliminate federal taxes on income paid to your children, and income paid to your spouse is exempt from FUTA tax.
5. Start a Retirement Plan
When you own your own business, you miss out on being able to fund a 401(k) with payments matched by an employer. However, you should still have a retirement plan in place. And some plans allow you to save on taxes.
Some retirement plans that allow business owners to save money on taxes include the Simplified Employee Pension Plan, IRAs and Roth IRAs, and 403(b) plans.
Take Steps to Minimize Your Business Taxes Today
With that, you now have five strategies available to you to lower your business taxes in New York City. Whether you’re starting a new business or working on tax filing for the first time, there are incentives available to anyone doing business in New York.
For more valuable information on everything from finance to business practices, continue reading our blog.
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