Small business Taxes & expenses: At a time when many companies close their annual accounts and report their corporate tax and that the income of executives, a question keeps coming up: how to optimize taxes and charges and when to do it?

First, for taxation, optimize means less "reduce costs" that "effectively pay where I decide"!

The entrepreneur can thus act on what they pay to the state, namely the income tax (as company), the income tax (Individual) and social charges on their salaries.

Depending on the levers it will operate, will choose the best time to make optimization decisions.

Reduce occupational tax (corporate income tax)

Before the closing of accounts, it is possible to recover the company additional social contributions, such as funded pensions. This will provide for future additional income, the amount of which will depend solely on my contributions (and not those of others as in the PAYG).

This option allows you to vary the tax result of his company (and therefore act on the amount of corporate income tax) while improving its future revenues.

If the entrepreneur pays social contributions of type "premium pension" on the one hand, this expense is deducted from earnings (it can save up to 33% of the contribution) and secondly, it capitalizes to create an additional income during his retirement.

It is suggested to start contributing as soon as possible in his entrepreneurial life of such products.

These decisions must be taken before the end of the year. Indeed, to beings considered, contributions must have been paid during the fiscal year.

Balancing personal taxation (income tax) and professional (corporate tax)

A contractor that increases income in the company reduced the amount the amount of the tax structure must pay, but increases his taxable income!

The question is that of the progressivity of the income tax.

If an entrepreneur decides to take additional compensation of € 15,000, and it saves 15% corporate tax (not to mention the social costs), but that these € 15,000 are taxed personally at 41%, the result, on the sole criterion of the tax is rather disappointing!

And do not forget that for a € 15,000 Net SAS president will generate about 12 K € social charges payable by the company!

It is therefore a matter of finding balance threshold that will limit the tax (in all, that is to say, the income tax and that in society), while contributing to better, especially for retiring.

These decisions are made after the closing of accounts, but before filing his professional and personal statements, ideally with the help of his accountant.

The timing depends on the legal form

For SAS, the time is short, because the company must report to the URSSAF before January 31, wages earned in society. Available time: one month maximum.

In SARL, the manager has three months to decide, after the date of closing the accounts.
Have less income taxed at the income tax
One thinks immediately to dividends!

Beware, they are normally taxed and especially social charges are high in SARL (40%) and still supported by SAS (15.5%).

Besides, to associate very predominant or sole of an LLC in most of the situations encountered, there is no tax incentive to pay dividends, but much more to increase income if applicable.

However, for SAS, it should make a small calculation to determine the optimum amount to be collected dividends:

SAS, dividends are taxed after deduction of 40% in income tax and support 15.5% social charges. SAS Chairman of remuneration are taxed with a 10% reduction on pay and social charges 80% more net. But do not forget that this income source of tax savings companies!

At a certain level of income (to be defined by income of her tax household one hand, and the tax bracket on the other firms), it becomes more interesting to pay dividends!

In any case, this analysis will occur after the closing date of the accounts, and ideally within 6 months of the closing date (i.e June 30 for companies whose fiscal fund is closed on the previous 31 December).

You'll understand, there are many ways for an entrepreneur to optimize taxes and charges in order to have a thoughtful management of its business resources.