Karla Dennis, CEO of KDA Inc., a tax accounting firm, highlights five tax codes that business owners can utilize to reduce their tax bill.
The first code discussed is Section 179, which allows business owners to write off expenses like equipment and vehicles immediately instead of over several years. Code Section 199 A, also known as the QBI deduction, offers a 20% deduction against net profits for flow-through entities. Section 212 covers tax-deductible expenses related to income production, such as advisory fees paid to stockbrokers.
Code Section 1202 allows for the exclusion of gains on the sale of small-business stock if held for a specified period. For example, a business owner can exclude up to $10 million in gains from the sale of their business using this code. Code Section 401 allows for money to be deferred for future retirement through options like a 401(k) plan.
To take advantage of these tax codes, it is essential to understand and keep track of qualifying expenses. It is recommended to consult with a tax professional to determine eligibility and maximize tax benefits. The information provided is not financial advice and should be approached with caution. Karla Dennis advises saving these tax codes for tax season and seeking professional guidance.
