We are firm believers business owners should do all they can to minimize their tax bill. But sometimes that comes in unusual ways. Did you know, for example, that simply splitting your company can save you money on your tax bill?
The Tax Cuts and Jobs Act actually created several scenarios where this makes sense. Take, for example, an accounting company like us. The Tax Cuts and Jobs Act has several provisions that don’t favor services such as accounting. It labels them as service industries and reduces or eliminates benefits businesses can gain. Payroll services, on the other hand, aren’t a part of the restricted industries. So these services as a stand alone company can recognize the full benefits of the business. An accounting company providing both can split its business and get better tax savings as two separate companies.
4 Ways You Can Successfully Oversee Multiple Businesses and Save on Your Tax Bill
When you’re running a business, it’s easy to think of your company as a single entity. But there are times when having two companies can make sense — and even be preferable. Especially when it comes to your tax bill.
Here Are 4 Ways You Can Successfully Oversee Multiple Businesses:
1. Use the same physical space to run both places.
If you have one location where you run both companies, it makes it easier for employees and customers. They can use one set of equipment and supplies and share key needs like telephone lines and printers.
2. Bring the two businesses together as much as possible across processes.
When it comes to things like human resources, accounting, payroll and marketing, try to do everything with one vendor or online service — such as using QuickBooks Online for accounting or using MailChimp as a marketing tool that works with both companies’ email lists. This will help streamline your operations so your employees don’t have to learn too many new systems.
3. Prioritize what needs your attention.
prioritize what needs your attention most urgently. This may mean delegating certain tasks to other employees or outsourcing them altogether if necessary. For example, if tax planning isn’t something that comes naturally to you but it’s something that needs to be done for each of your companies anyway, consider hiring an accountant or financial advisor who specializes in this type of work so they can handle it on their own while freeing up more time for other aspects of your business.
4. Bring in Experts Where Needed
Bring in experts to handle certain aspects of the company like tax planning or human resources management if needed so that you can focus on other areas like sales or customer support for instance.
There are many types of professionals who can help you look at your business from a different angle, including:
- Accountants – They can review your financial statements and give you tips on how to improve them. They can also assist with things such as CPA services and tax planning.
- Lawyers – They can help with contracts and other legal matters related to starting a business or protecting your existing one from lawsuits or copyright infringement claims.
Wasatch CPA Services Can Help You
These are just a few examples of tax benefits you can gain by dividing your company and ways you can be successful. Moreover, you can do it without actually losing either business!
Interested in discovering the best structure to reduce your tax bill? Let’s get on a call. We are located in Utah but offer services nationwide.