Small Business Tax Strategies

Smart small business owners save thousands of dollars per year on their personal and business taxes by taking advantage of the legal loopholes that the government creates for their unique tax situation. Small Business Tax Strategies cuts through tedious tax code to reveal the bonanza of completely legal opportunities to grow personal wealth and secure an enjoyable retirement.  Learn more about Small Business Tax Strategies and the two free reports you’ll get when you subscribe...

Q. We can’t afford to give employees raises this year. Can we provide group life insurance, which would be cheaper, instead? R.L.S., Tulsa, Okla.

A. Yes. In fact, employees will benefit from a tax break for employer-paid group life insurance. The first $50,000 of coverage provided by the employer is tax-free. Coverage above the $50,000 threshold is taxable based on the age of the employee on the last day of the year. If an employee contributes to the premium payments through payroll deductions, this reduces the taxable amount. Use the IRS-approved table for calculating the tax.

Tip: You might include group-term life insurance in a cafeteria plan allowing employees to choose the tax-free benefits they prefer.