There is a lot to know when you first start your own small business. You’ve got to be on top of what your business does, get your product or service out there and manage daily operations. Everything is up to you, and it’s often a one-person operation at the start.
One of the last things people think about on top of financials is taxes. They are an important facet of running a small business and you should not fear or avoid them. There are a lot of ways you can use your knowledge and aptitude for taxes to the advantage of your small business.
Understanding Small Business Tax
During tax season, the main objective of a small business should be to limit the amount of money they pay, while maximizing deductions and credits. It’s one of the most overlooked ways to save money each tax year. There are some basic tenants of saving for taxes you should keep in mind.
For one, you’ll want to always keep all your receipts. Try to save all of them in one central location for later. A lot of these receipts may add up to some massive deductions come tax time.
That is just one simple fundamental aspect for taxes. There are some things that you’ll have to look deeper into, as well. For example, consider carrying forward your healthcare tax credit. Any business that employs less than 10 full time employees can claim this credit. It comes on IRS Form 8941, and you can use that to calculate if you’re eligible for it.
Finding a Tax Service
A small business owner’s time is crucial, so they can’t delegate it all over the place. The less time you spend on the actual business, the more you lose out on other major aspects. That’s why it is important to hire extra help, like an intelligent tax service. Companies like Prospect Financial Solutions offer dedicated services to help clients to cover all accounting and tax return aspects of the business.
Your peace of mind and tax return will be in good hands because a tax service like Prospect Financial files business taxes for those with partnerships, LLCs and corporations. Tax laws can confuse many people, and it is a tax service’s job to take care of that for your business.
By working with a tax service, you’ll be able to ensure that during tax time, your taxes will be in the right hands. They can handle all the required files and other financial documents to help you save more money, while making sure everything goes through seamlessly.
Additional Deductions Assistance
A lot of small businesses can deduct things they aren’t aware of, and that is why it is important to know what types of records to keep to send into your tax service. For example, there is something called the section 179 property. It includes up to half a million in business properties that the IRS can tax.
The deductions include manufacturing, transportation or production properties. This includes any areas or facilities you use to conduct business or research in, as well. It doesn’t include land, investment properties or anything outside the United States, though.
A lot of small businesses make charitable donations throughout the fiscal year and they can discount whatever they donated. This is a great way to maximize your charitable contributions and get a tax deduction in the process.
For example, think about donating stocks instead of donating liquid cash. Your business can deduct what the stock was worth when you contributed it, as opposed to what you paid for it originally. Always look for deductions you can use to your best advantage.
Every Day Use Deductions
Most businesses use a lot of technology. Equipment expenses that include computers, printers, and other types of technological assistance are eligible for deductions. You may be able to deduct the entire cost of the item during the year, or split it between a couple of years.
It’s not just hardware that you can deduct, either. The government understands how much software can cost you in the long run. The great thing about these every day deductions is they are helping businesses grow affordably. They’re both an investment in intellectual capital and a tax deduction at the same time.
Remember to practice diligent record keeping, and use a reputable tax service, so you can pay Uncle Sam while saving more money for building your business.