I know the last thing you want to read about is taxes. You're glad April 15 is behind you, and it's still tough looking at your bank balance since you wrote out that check to the IRS.

        But you promised yourself to find a way to reduce your taxes. Now that all the accountants have returned from their post-taxtime trips to Mexico, it's time to do some planning for next year.

        Having a small company gives you lots of headaches, but it also gives you tax breaks, too. You're just throwing away money if you don't take advantage of them. But you can't wait until the last minute. Here are a few steps to take now:

        • Get the right professional help. Do you still get your taxes done by a tax preparation service in the mall? Perhaps that worked when you were an employee or your business was tiny, but you may have outgrown that solution. It's probably time you found an accountant who specializes in business taxes or is familiar with your industry. Ask other entrepreneurs or members of professional or industry trade associations for their recommendations of good CPAs in your area.

        • Select the right corporate structure. Are you operating as a sole proprietorship or partnership rather than as a limited liability company or corporation? If so, you may be losing out not only on some tax advantages, but putting your personal assets at risk. Moreover, you are probably increasing the likelihood of being audited, especially if you mingle personal and business expenses.

        • TSet up a good bookkeeping program and record-keeping system. To the IRS, bad account records mean you have something to hide, even though you know it just means you're disorganized. Moreover, most small companies lose legitimate deductions because they don't keep adequate records. I'm afraid I'm guilty myself; I can't tell you how many times I've forgotten to ask for a receipt for a taxi fare on a business trip. Over the course of a year, all these little deductions add up. Keep track of your expenses, enter them into a good accounting program regularly and keep the receipts neatly filed.

        • Set up a retirement plan. One of the best tax shelters available to entrepreneurs and small businesses are retirement programs. These include Simplified Employee Pension Funds/Individual Retirement Accounts (SEP/IRAS), Keogh plans, etc. If you have no employees, you can shelter up to 15 percent of your bottom-line profit from taxes. I'm a big believer in every self-employed entrepreneur setting aside some money every year — it's a great tax shelter and it's important for your future financial well-being. Talk to your accountant.

        • Apply for a federal tax ID number instead of using your Social Security number. This doesn't directly save you any money in taxes, but the IRS likes it better, and it's just a better business practice. You don't have to give your personal Social Security number to everyone you do business with, and you seem more like a “real” business. A federal tax ID number is easy to get.

        • Avoid trouble. If you have employees, the biggest extra taxes you're likely to pay are penalties on goofs you make with payroll tax. The government really hates it if you pay late or make mistakes, and they levy hefty fines. That's a tax on a tax. Yikes!! Save money, get a payroll service.

        • Self-employment tax. One surprise you encounter when you first set up your own business is the high cost of self-employment tax. It can take a huge chunk out of your earnings. Discuss ways, if any, to legally minimize this tax with your accountant.

        • Timing. A little advance planning can save a great deal of money. When you send invoices, order inventory, buy new equipment, etc., can all have an impact on your taxes. Discuss when your fiscal year should be as well.

        Accountants do more than just prepare tax forms; they can help you understand financial and tax implications of your business decisions. Surprise your accountant and make an appointment for a tax discussion. You'll find they've got a lot more time for you now than they do on April 10.

       Rhonda Abrams is the author of Wear Clean Underwear: Business Wisdom from Mom, and The Successful Business Plan: Secrets and Strategies. For free business tips from Rhonda, register at www.RhondaOnline.com, or write her at 555 Bryant St., number 180, Palo Alto, CA 94301.

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