4 Ways To Eliminate (Or Significantly Reduce) Your Tax Bill Why are you paying federal taxes when your money could be put to better use?

If you hate paying taxes to the U.S. government, and you run a small business, then I have a suggestion for you to help you eliminate — or at least significantly reduce — those tax payments. Actually, I have four suggestions. Of course, the usual caveats apply: circumstances may vary, check with your accountant, laws may change, etc. But try any — or all of these actions — and you'll find yourself not only owing less to the federal government, but building a better business for yourself.

1. Pay your employees more

Why give the federal government your hard-earned money when you can give it to your employees, who are mostly responsible for your success, instead? If your business is on the accrual method of accounting (which means you match expenses and revenues regardless of whether cash was received or paid) then you have an extra advantage. Tax rules will allow you to wait until the end of the year, and then figure out how much money your company made and then pay a discretionary bonus to your employees. The "accrued" deduction can help you reduce or even eliminate your profits. Or you can contribute to your employees' 401(k) benefit plan. You can do both within 75 days after your tax ends and still get the deduction.