Reduce Taxes by Re-Investing in your Business
As a webmaster one of the easiest ways to reduce your total tax burden is to simply re-invest your profits back into your business. Remember, every dollar you spend advertising, buying links, doing SEO work, etc is fully tax deductible as a business expense. As webmasters we all know that content is king and one of the best ways to reduce your tax burden is to purchase more content. Build a good network of freelance writers and use them to produce more content. Why pay taxes on $5,000 in profit when you can spend that $5,000 on making your website bigger and better? The more content your site has, the more traffic you’ll pull in and the more money you’ll earn next year.
On the other hand, you can reduce your tax burden by purchasing necessary equipment like computers and office furniture. It’s important to a fast reliable PC if you’re doing work online all the time and if you purchase a PC for business purposes the entire cost can be written off as a business expense. Just about anyone who does work online as a programmer, webmaster, web designer, etc can justify the purchase of a new PC as a business expense.
A good way to expand your business while reducing your tax burden is to launch a new website all together. I’m personally always looking to expand my portfolio of websites by getting more content written or simply launching new websites. An alternative to this is to purchase established websites on sites like Flippa and Digital Point. The purchase of these websites can be classified as business expense and can be deducted from your total income. I find that the more I reinvest in my business the more it’ll pay off in the future. So unless you need cash for a real life emergency, you should seriously considering reinvesting your profits into making your business bigger and better!