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Tax time tends to be one of the most stressful times of the year for most small business owners. This is largely due to the fact that instead of preparing throughout the year for tax season, we tend to wait until the last minute sort of like cramming for an exam. Implementing some of the tips that we have shared with you below will not only reduce your stress but also save you time and money.
Easy-to-use tax preparation solutions have become an increasingly popular way for small business owners to navigate deductions and tax law changes. The programs ask simple questions about business income and expenses to help maximize your deductions.
Best Tips : Tip 1: Buy to save:
Whenever buying new equipment, technology, software or even furniture for your business, save those receipts and keep detailed records that include purchase price and date placed into service. You should be able to substantiate any expenses you claim on your tax return.
Tip 2: Always the season for giving:
Company donations of money, supplies and property are all deductible expenses. So are bonuses (and associated payroll taxes) awarded to your employees, partners and officers. If your business is an S Corporation, keep a close eye on officer compensation to ensure you meet IRS requirements and thus avoid penalties.
Give yourself the gift of education. Take a class or seminar or attend a convention that helps you maintain or improve skills required for your business.
Tip 3: Business is sometimes personal
If you use your home for your business, you may be able to deduct mortgage interest, insurance, utilities, repairs and depreciation.
Corporations and partnerships can also deduct actual expenses for non-personal uses of your personal vehicle, as well as reimbursements to employees for business use of their personal vehicles. Actual expenses may include costs for fuel, maintenance and parking fees. Your detailed mileage records should include date, total miles, tolls, parking and purpose of trip. You can also deduct vehicle depreciation and loan interest.