5 Tax Savings Strategies for Small Business Owners

Running a small business means managing everything—from sales and service to payroll and planning. Taxes can quickly become one of your biggest expenses, but with a few smart strategies, you can reduce your tax burden and keep more of your hard-earned income.

As a small business accountant in Northville, I help clients every day uncover opportunities to save. Here are five general tax-saving strategies every business owner should know. (This is not tax advice. Please consult with a qualified professional to determine what applies to your situation.)

1. Keep Detailed Financial Records
One of the most effective ways to lower your tax bill is to organize your business finances. Accurate, up-to-date records make it easier to claim all eligible tax deductions and business credits—and to avoid costly mistakes or missed opportunities.

If you’re overwhelmed, I offer bookkeeping cleanup services and monthly bookkeeping services to help you stay on track.

2. Consider Buying Equipment Instead of Renting
When you buy equipment or machinery for your business, you may qualify for depreciation deductions or Section 179 expensing. These can offer a significant tax break in the year of purchase—whereas rental fees generally aren’t as beneficial long-term.

Thinking about a big purchase? Let’s run the numbers to see what makes sense for you.

3. Use Available Small Business Tax Credits
Several federal tax credits are available to eligible businesses, including:

Small Business Health Care Tax Credit

Work Opportunity Tax Credit (WOTC)

Employer Credit for Paid Family and Medical Leave

These incentives can reduce your business tax liability and improve your bottom line. I help identify and apply for credits that many small business owners overlook.

4. Use a Dedicated Business Credit Card
Using a business credit card can help you:

Separate business and personal expenses

Earn rewards or cashback

Easily track deductible spending

More organized spending means cleaner records, which helps during tax season—and in case of IRS inquiries.

5. Pay Yourself Strategically
Rather than paying yourself a fixed amount no matter what, many small business owners benefit from paying themselves based on net profits—after all expenses are covered. This approach helps avoid over-withholding and allows room for retirement contributions and tax planning.

Looking at options like Solo 401(k)s or SEP IRAs can also offer significant savings when structured properly.

Make a Plan, Not a Guess
Taxes don’t have to be a guessing game. With the right guidance, you can make confident, informed choices that help your business grow while reducing your tax burden.

At Walker Tax Relief, I provide personalized tax preparation services, IRS representation, and year-round tax services for small businesses throughout Michigan.

Let’s talk about how to keep more money in your business.
Whether you need help with bookkeeping for small business, back taxes, or proactive planning, I’m here to support you—every step of the way.