If you own a small business, tax season remains one of the most important times of the year. Here are five essential tax tips for small business owners.
Keep tabs on all business expenses
In regards to business expenses, it is critical that you track every single payment. However, business expenses should never be placed on your personal account. For instance, you may need to purchase paper for a fax machine. This is the perfect example of a business expense. Remember, small purchases are just as important as the larger ones.
Home office deductions
If you have transformed an unused bedroom or storage building into a home office, you are likely eligible to receive extra deductions. However, keep in mind that the IRS takes home office deductions very seriously. The home office should always be used for business purposes only. Some of the typical home office deductions include computers, printers, office supplies, electricity, and even furniture.
Remember all of the critical deadlines
While most people understand that the deadline to file annual returns is April 15th, some small business owners forget to pay their estimated taxes. Basically, every small business owner who expects to owe at least $1,000 in taxes will need to make quarterly payments. If you fail to pay your estimated taxes on time, the IRS may charge you a penalty.
When it comes time to file your taxes, do not forget to include your business-related trips. If you are traveling via car, you will be able to deduct the cost of your fuel. Some of the other business-related deductions include food, interstate highway tolls, cab fees, and the expense of a hotel room. Even short trips to the local post office count. Nevertheless, you still need to keep detailed records of everything.
Never leave money on the table
As a small business owner, you should seek to get as much money as possible from your tax return. According to Choice Accounting Solutions Miami tax accountants, thousands of business owners forget to account for all of their out-of-pocket expenses. After making a purchase, the receipt should be promptly scanned and stored in a fire-proof safe.
There is no overlooking the fact that taxes can have a major impact on the success of a small business. Be sure that you are always prepared for the upcoming tax season.