Don't Pay Tax On Out-Of-State Sales To Your Home State -- If you do business outside of your home state, you may not have to pay taxes on that income. Say you sell $1 million worth of widgets in 10 states, and each state accounts for an equal 10% of the revenue pie. As long you only sell the widgets (as opposed to providing after-sale service or support), Public Law 86-272 says that you don't have to pay taxes on 90% of that income -- known affectionately in tax planning circles as "nowhere income." This strategy works in about half the states, so ask your tax adviser about it.

Shield Income With Today's Losses -- Losing money stings, but at least it reduces your tax bill. Say your business posted a taxable loss of $100,000 this year, but in 2006 and 2007 had taxable income of $30,000 and $40,000, respectively. Suppose, too, that your corporate tax rate is 30%. You can use this year's loss to offset your tax bill from the previous two years and put money back in your pocket today -- in this case, $21,000, or 30% of $70,000. As for that remaining $30,000, you can use it to shield income in the future. Note: You have to make an election upon filing to forgo the carry-back, says Kathleen Barrett, partner with AGH, LLC, an accounting firm in Atlanta. Sometimes a smallish loss this year isn't worth the cost of the accounting gymnastics.

Go Green -- Federal and state governments are throwing money at small businesses in the form of tax incentives for environmentally friendly initiatives--from solar panels to energy-efficient washers and dryers. In Georgia, for example, a new Clean Energy Property Tax Credit program will dole out $2.5 million a year over the next five years, says Peter Stathopolous, a director at accounting firm Bennett Thrasher PC in Atlanta. In some states, small-business owners can use green credits to offset both corporate and personal tax bills. For a comprehensive list of incentives, check out the Database for State Incentives for Renewables and Efficiency.

Go Diving For Depreciation -- Different equipment deteriorates at different rates, and your books should reflect that. If you want to conserve the most cash, make sure to tag and depreciate every last printer, light fixture and rug separately, says Cindy Buie, another partner at AGH in Atlanta. Don't forget, too, about Section 179 of the Tax Code, which allows you to deduct $100,000 worth of qualifying assets during the first year, as opposed to stretching things out over a longer period. Note: Section 179 write-offs cannot exceed taxable income. So, if your company posted taxable income of $100,000 but you bought $400,000 in new equipment, you might better off taking advantage of accelerated depreciation rather than Section 179, notes Richard Zuckerman, partner with Lesser Leff & Co., a New York accounting firm.

Employ Your Children -- Doing business with family has its challenges, but at least it comes with a tax benefit or two. Putting Junior on the payroll means he's qualified to begin contributing to a Roth IRA, a smart way for him to start saving for retirement. Another perk: Assuming your boy stays in the business, by putting him on the payroll you are essentially shifting a portion of the company's income into a lower tax bracket--his. You also receive a larger tax deduction for a dependent earning a wage than one who doesn't, notes Richard Dauman, a principle at Bessemer Trust.

Report Large Cash Payments -- Listen up, members of the under-the-table crowd: Cash transactions greater than $10,000 must be reported to the IRS, via Form 8300, say AGH's Blue. That mandate goes for payments with cashier's checks, traveler's checks and money orders as well. Part of the information you'll need to complete a Form 8300 is the social security number of the buyer. (Beware buyers that give you push back--they may not want to be on the IRS' radar screen.) One weird caveat: While selling personal real estate doesn't require a Form 8300 filing, selling a mobile home does.

Pay Dividends This Year -- With government deficits mounting, there's a good chance that the current 15% dividend tax rate will jump in the near future. "None of us has a crystal ball, but maybe we're looking at a 20% dividend rate down the line," says AGC's Barrett. The mechanics of these distributions are slightly different for C corporations and subchapter S corporations, so be sure to huddle with your accountant.

"Abandon" Your Business For the Right Deduction -- Say your company has suffered a mortal blow. You could spend the time and money to sell it off in pieces, or you could simply walk away (in legal jargon, that's called "abandoning" the business). Abandon it right, and you just might trigger a tax benefit that's greater than the sum of all the pieces in liquidation. If you go the abandonment route, be sure to generate an "ordinary" loss versus a "capital" loss, says attorney Norman Lencz, partner at Venable LLP in Baltimore. Ordinary losses are unrestricted--meaning that you can use the entire loss to offset any other personal income (rent, salary, etc.); capital losses, on the other hand, can only be used to reduce certain sources of income, up to a limit, before being carried forward to future years.