Albert Einstein once said “the hardest thing to understand in the world is the income tax.” Personal taxes can be confusing enough; but as a small business owner having to file taxes as a business on top of that can become overwhelming. However, it doesn’t have to be this way. As a small business owner there are several easy ways that you can save some money on your taxes.Everyone wants to save on taxes. If you own or manage a company, you may have more ways to save on taxes than most people. Deducting your business expenses can be simple. In order to be classified as deductible, a business expense should be both ordinary and necessary. An ordinary expense is classified as something that is common among the trade that your business is affiliated with. A necessary expense is one that is beneficial and applicable towards the business. Using this guideline, here are some tips on how you can save:
Every business needs some sort of technology, whether it’s computers, or a cash register or even security cameras. Under Section 179 of the tax code equipment expenses are considered tax deductible. Don’t hesitate to get the technology that you need for your business. As long as it is a necessary investment.
Sometimes in order to reach the level of success that you desire for your business, travel is necessary. The good news is that many travel expenses are completely tax deductible. Travel fees including, but not limited to air fare, rental cars, and hotel expenses are eligible for tax breaks.
If you are a business owner that works from home, you may be able to write off any expenses associated with building a home office. However, when doing this there are certain guide lines that should be followed. The office should be distinct from your living area. There should be a clear divide from your office and the rest of your home. Also, make sure that any technology such as a computer operated for business use only. If you use your home office computer for personal use, it is best to keep it omitted from your write off.
Small business owners have ample opportunities to save on their taxes. The Golden rule to follow when making these cuts is to save all receipts and transactions. Keep detailed records of your purchases so you will be able to easily validate them when it is time to file your tax return. While it may seem like a lot to do this for every purchase, once it becomes a habit the more routine it will seem. This practice will also help you in the chance that you get audited because all your transactions will be detailed and organized. The more organized your finances are, the more you can focus on making your business successful. Running and maintaining a business can become expensive, however, when you understand your taxes and knowledgeably file those costs can find their way back into your wallet.
Nazaire & Co
Founded in 1997 Nazaire & Co. offers services in accounting, consulting, bookkeeping, and financial services to individuals and businesses.