Posted: 12/9/2011By: Katie Kylen
Times are tight for many small business owners. As the end of the year approaches, entrepreneurs should be looking for ways to reduce their tax burden going into 2012, according to a CNBC article by small business writer Barbara Weltman.
Tax deductions can be found through a number of different channels, including giving year-end cash bonuses to workers, claiming depreciation deductions on new and used equipment, donating cash or inventory to charities recognized by the Internal Revenue Service and ordering supplies for 2012 ahead of time.
Deductions can also be found by adopting a qualified retirement plan, such as a 401(k), and including employees.
"As long as you sign the paperwork with the financial institution at which you'll keep the plan, you then have until the extended due date of your 2011 return to make contributions that will be deductible on your 2011 return," Weltman writes.
According to a Nationwide Financial study, just one in five small businesses offer their workers a 401(k) or other employee self-funded retirement plans, so providing one could help entrepreneurs set their companies apart from the pack.