A strong tax planning strategy can save your business money. Amazon received press earlier this year after its tax bill became public. The retail giant paid only $1.4 billion in income taxes between 2008 and 2017. This is significantly lower than another giant in the retail market, Walmart. Walmart reportedly paid over $64 billion in income taxes during the same time period.

From Goliath to David: What small businesses can learn from their larger counterparts when it comes to tax planning

How did Amazon end up paying only a fraction of the taxes as others within the same market? The business focused on reducing its tax obligations with a strong tax planning strategy.

Although the best tax strategy will vary for each business, two general tips that apply to most include:

  • Review credits. One of Amazon’s keys to a lower tax bill: take advantage of tax credits. Although small businesses will likely apply for different tax credits compared to Amazon and other giants, there are credits that can help smaller businesses reduce their tax bill. Some of the top tax credits available for small businesses include the Employer Wage Credit, Child Care Credit, work Opportunity Credit and Small Business Healthcare Tax Credit.
  • Consider using stock or equity as a form of compensation. The IRS provides incentives for businesses to share equity with employees.

The Tax Code contains thousands of pages of deductions, credits and other tax incentives. Many of these incentives are designed specifically to help entrepreneurs and business owners reduce their tax obligations. Take the time to make the most of these incentives and reduce your business’ tax obligations.