Small businesses have an especially hard time when it comes to taxes. Here are seven tips that will help keep you focused and could help save you money.
1. Deductions – Make the Most of Them
While reviewing your expenditures, remember that ‘ordinary and necessary’ business expenses aren’t just equipment and rent. Business losses can be deducted from the business owner’s personal income taxes. In addition, if you are on a business and pleasure trip, the transportation costs are deductible if you spend more than 50% of your time doing business. Check with your accountant to find out if you are making the most of your deductions.
2. Check out Tax Credits
There are a variety of valuable tax credits available that can reduce your tax liability. These tax credits include Employer Social Security Credit, Disabled Access Credit, Work Opportunity Credit, Research Credit, Investment Credit, and more. Ask your accountant what credits are available for your business.
3. Quarterly Estimated Tax
If your business has a tax bill of more than $500, you should be paying quarterly estimated taxes or you may be hit with IRS penalties which can severely impact your business’s cash flow.
4. Don’t Forget to Give
Charitable contributions can be claimed as deductions!