It’s very tedious to get all of your taxes in order for the IRS’s annual exams. It might feel overwhelming already for you to file your taxes personally, for your own personal finances, but filing taxes for your business is a whole other story. These tax tips for small businesses will help your business achieve better financial stability.
If you want to take the responsibility all on your own, to sift through your financial data and make sure you do all the filing of taxes accordingly, then good for you. I always say and believe that getting help with your taxes would be a wise decision for your personal life and your business, that way you can spend your valued time doing other things that are considerably more valuable.
With that said, here are some tips and tricks to doing your taxes if you have a small to medium size business:
Hire Help When Needed
I mentioned having another person (definitely a professional accountant) to help you with your taxes. That would definitely be tip number one.
Having a professional in the tax and accounting world, organize and help your business file its taxes properly will be a win for you.
If you personally don’t know how to file your taxes properly, you may be poised for a government penalty if you did something incorrect with filing your taxes. Having a professional do the work, or at least assist you in doing the tax work will be in your best interest.
Still, if you feel comfortable enough to do taxes all on your own, but do want that little extra help, then invest into an accounting software that will help you organize your financial data, to make organizing the relevant data easier to assess for filing your taxes. This is tip number two: buy technology that will help your business file its taxes more easily.
Purchase the Technology That Will Help You
Buying technology to help your business grow in general will be a wise investment (leaning how to use the technology is another story), but if you purchase a product, such as a computer, printer, even a company car, under Section 179 of the tax code, these technologies (at least some of them) purchased for the use of your business can be tax deductible.
So why wouldn’t you want to purchase the technology to better organize your financial statements, and make your tax filings easier?
Business related software also qualify under Section 179 of the tax code for tax deduction. Each deduction, depending on the model of the item will have varied deductions from taxes after purchase. The government also adjusts the tax deduction rate from technology purchased for your business every year, so stay up-to-date with the technology of your business and the regulations set by the government.
This category has two tax tips for small businesses put into one. Buy the technology that will help assist you with your finances and taxes. Also, check to see which items you have purchased for the use of your business is tax deductible.
As a small to medium sized business owner, you are probably required to travel a lot for business purposes. The government of the United States of America will deduct taxes from your travels, as they know how important it is for a small to medium size business owner to travel from one place to another for business purposes.
This tax tip requires you to write off any travel expenses that are deductible, such as airfare, hotel fees, car rentals, laundry as a travel expense, etc. Food can be deductible only up to 50%.
Things to remember when traveling are:
- Only the costs of you and others traveling with you for business related purposes can have their cost6s deducted. If you bring family with you, just for fun, their costs will not be deducted
- Taking clients out for a meal gives you a 50% deduction on costs (just make sure that you write on the bill and receipt the reason for the meal)
- Entertainment is not deductible
- Conferences, where your company holds a meeting to better the growth of your business is deductible. Independent side projects for yourself (that has nothing to do with your business) is not deductible
Appreciable Stock Contributions
Businesses who donate money for charitable contributions throughout the year can have that donation deducted. If you bought stock purchased at $50 before, but now it has appreciated up to $100 for that same share of stock, if you donated that one share of stock, you can get back $100 at tax time. The deduction of $50 you paid for the share, plus the additional $50 that the share appreciated.
Deductions for Home Office
When you have your home office expenses deducted, make sure you have all the relevant data organized and easily readable, that shows what expenses were used for your business’s purposes.