How to minimize large commissions paid to my new LLC?
How can I limit my tax burden for upcoming large commission when I just started an LLC (providing tech consulting services) and when I am also employed by a company based in Mexico? Thank you in advance!
Answer
The main ways to minimize your taxes are to:
1. Increase expenses
2. Delay recognition of income
In terms of the "large commission" you are about to receive, can you arrange to receive it in January?
That way, you would push off recognition of the revenue until the 2009 tax year, and wouldn't owe the tax until April of 2010 (though you would have estimated taxes to pay along the way).
The other thing to do is try to "accelerate" any expenses to this year.
Is there some large expense you plan on making in January or February of 2009? Can you make the purchase now and take the deduction in 2008?
Another way to minimize your taxes is to make sure to use good tax preparation software.
Good tax preparation software is about more than just getting the math right--it is about helping you find all the deductions that you are entitled to.
The questionnaire that TurboTax Online puts you through is invaluable not only for spotting deductions for 2008, but for planning your taxes for next year.
