News and Announcements

Running a small business in Middlesex or Union County isn’t for the faint of heart. Between rising costs, competitive markets, and a mile-long to-do list, taxes might feel like just another headache waiting to happen.

But here’s the thing: with the right tax strategies, you can actually keep more of what you earn — and invest it back into growing your dream.
There are over 50,000 small businesses operating across Middlesex and Union Counties, and smart financial planning is what separates surviving from thriving.

Whether you're a one-person operation or a growing team, these tips will help you cut your tax bill and stay compliant — without losing your mind.

Let’s dive in.

Choosing the Right Business Structure

Your business structure isn’t just a legal decision — it’s a tax decision too.
An LLC, S Corp, partnership, or sole proprietorship all come with different tax treatments.

• S Corps, for example, can help you avoid double taxation and allow you to split profits between salary and distributions, possibly lowering overall tax liability.

• LLCs offer flexibility — you can choose to be taxed as a sole proprietor, partnership, or even an S Corp.

Important: Always consult a CPA or attorney before forming or changing your structure — getting it wrong could lead to costly penalties down the road.

Choosing the right setup from the beginning — or adjusting it as you grow — can save you thousands over time.

Maximizing Business Deductions

If it’s necessary for your business and properly documented? It might be deductible.

Key deductible expenses include:

• Office rent and utilities

• Business insurance premiums

• Software subscriptions (yes, even your CRM)

• Continuing education or training expenses

• Professional services like legal or accounting fees

Example: If you document $10,000 in deductible expenses, you could lower your taxable income by $10,000 — saving approximately $2,500 to $3,500 in taxes depending on your bracket.

And remember, businesses operating in Urban Enterprise Zones across Middlesex and Union Counties may qualify for additional deductions or reduced sales tax rates.

Every dollar you track and properly claim is a dollar saved.

Taking Advantage of Section 179 and Bonus Depreciation

Bought new equipment, a work vehicle, or technology upgrades this year?
Good news: Section 179 allows you to deduct up to $1,220,000 in qualifying purchases in 2024, with a phase-out threshold starting at $3,050,000.

Even better, Bonus Depreciation lets you write off used assets too.

Think about it: buy $50,000 worth of equipment, deduct it immediately, and potentially save $10,000 or more on taxes. That’s business-savvy investing at its best.

Home Office and Vehicle Deductions

Running your business from home? Constantly zipping around Middlesex and Union Counties for client meetings?

Don’t miss these deductions:

• Home Office: Must be a dedicated space used exclusively and regularly for business. (No kitchen tables.)

• Vehicle: Choose between standard mileage (currently 67 cents/mile in 2024) or actual expenses — but either way, keep a detailed log.

Important: The IRS has increased its scrutiny on home office deductions, so accurate records are critical to protect yourself during audits.

Leveraging Retirement Plans and Health Savings Accounts (HSAs)

Planning for your future is also a smart tax move right now.

Consider:

• SEP IRA: Contribute up to 25% of your net earnings, with a 2024 limit of $69,000.
• Solo 401(k): Perfect for one-owner businesses — can contribute both as an employee and employer, maxing out retirement savings.

And if you qualify, a Health Savings Account (HSA) offers triple tax advantages:

• Contributions are tax-deductible

• Growth is tax-free

• Withdrawals for medical expenses are tax-free

Win-win-win.

Hiring Family Members

This strategy is more common — and legitimate — than you might think.

• Hire your child under 18 through your sole proprietorship and you won’t owe Social Security or Medicare taxes on their wages.

• Hire your spouse and deduct their salary as a business expense.

Caution: Wages must be reasonable for the work performed — the IRS frowns on inflated salaries designed solely for tax breaks.

Research and Development (R&D) Tax Credits

Think only tech giants qualify for R&D credits? Think again.

Small businesses in industries like:

• Manufacturing

• Healthcare

• Engineering

• Software development

can qualify by developing new products or even improving existing services or processes.

Federal and New Jersey state R&D credits can reduce your tax bill dramatically. Even small tweaks to your business processes may qualify — it’s worth a conversation with your CPA.

Local and State-Specific Incentives

Beyond federal programs, both Middlesex and Union Counties — along with the State of New Jersey — offer grants, abatements, and loan programs for small businesses.

Helpful resources include:

• New Jersey Economic Development Authority (NJEDA)

• Local Middlesex and Union County business development offices

• Urban Enterprise Zone (UEZ) benefits

Staying connected with your local chamber of commerce can alert you to programs you might otherwise miss.

Common Mistakes to Avoid

Even savvy business owners trip up sometimes. Here's what to watch out for:

• Missing quarterly estimated tax payments — leading to penalties.

• Overlooking state-specific credits and programs — like UEZ incentives.

• Failing to document expenses carefully — risking lost deductions and audit issues.

When in doubt, document everything. And get professional advice before making major financial moves.

Small businesses are the heartbeat of Middlesex and Union Counties — and with smart tax planning, you can keep more of your hard-earned money, reinvest in your future, and thrive even in a competitive environment.

Proactive tax planning could easily save you thousands every year. You don't have to figure it all out on your own.

Schedule your free consultation with us today — and let’s start building a powerful, customized tax-saving strategy for your business.