As a small business owner, the last thing you want to think about is taxes. But, doing so will lead to more money in your pocket come tax time. Here are five small business tax tips to keep in mind.
As a small business owner, you're often so busy and drowning in paperwork to think too hard about your taxes. Here are five major deductions you should be able to keep track of without too much trouble.
While some people fear to claim their home office deductions, it is critical to do so without the fear of an audit. What matters is to have your records preserved very well so that should need arise, you will be able to show that the deductions made are indeed for the entrepreneurial venture. While at it, you need to clearly segment your office so that it does not affect the power bills, rent and other utilities you claim.
Small businesses tend to travel quite a lot in order to facilitate growth. The IRS lets you deduct travel expenses since the fundamental objective is to help the business succeed.
You should consider writing off travel expenditures like air tickets, car hire fee, accommodation fee, and other travel expenses such as laundry. Of course, don't forget that your business mileage can be worth a lot of money at tax time through the mileage deduction.
Most small businesses use technology to help them grow. Thanks to Section 179 of the tax code, you can write off most of these purchases. This includes the costs of computers, machinery, equipment and even potentially cars and property. Be sure to follow the proper deduction rules on this or else you may face an unpleasant IRS audit.
Yes, you can deduct the costs of your business phones, including your cell phone bill. You do have to keep adequate records and you can't write off the total costs for phones you use for business and personal reasons. The easiest way to ensure your phone costs are fully deductible is to get a separate business line.
People who employ their children for legitimate business purposes can deduct some of those expenses. For children not exceeding 17 years of age, there is no social security tax, and so you could subtract their remuneration fee as a business expense. Be absolutely sure you're complying with the federal guidelines for child labor.
Even with the best game plan and an unending work ethic, getting your small business to succeed is tough. That's why it's so important to take these tax advantages and give yourself the best path to success.
That's why it's so important to keep track of every single business expense. I know, it can be tough when you're always so busy. But, doing so makes sure you can get the deductions you deserve and you have the records to back them up.