Let’s be honest—small business finances are stressful. And no matter how hard small business owners try, it’s all too easy for them to find themselves on the less prepared side of things come tax season. They have a lot to juggle, after all. Luckily, we understand the struggle and are here to help. Keep reading for our best last-minute tips regarding tax prep for small businesses.
Report Your Property
There are a lot of things that qualify as property when it comes to your small business taxes. Furniture, equipment, fixtures, vehicles, and more can be reported as Section 179 expenses—instead of just having those things depreciate over the years.
Small things like this can make a big impact, especially for small businesses just starting out. Take advantage of whatever tax breaks or credits you can!
Think About Who You’ve Hired
Hiring people from vulnerable populations has a lot of benefits. For starters, you’re providing much-needed job opportunities to veterans, people receiving SSI or food stamps, etc. If you hire anyone who falls into this category, you might be eligible for Work Opportunity tax credits.
Use Your Retirement to Your Advantage
Are you making the maximum allowable contribution to your retirement fund? You should be!
If you have an IRA and you’re under 50 years old, you can contribute up to $6,000—and then deduct that from your taxes. And if you’re over 50 years old you can contribute up to $7,000. Consider your employees as well. You might want to think about setting up SEP IRAs or other pension plans for your employees.
Expanding Your Business?
If you’re expanding your business, you might be able to write off some expenses. For example, if you build a website and launch your business into the e-commerce space, you could write off up to $10,000 in startup expenses.
Take Advantage of Deductions
Knowledge is power—especially when it comes to something as important and complicated as tax prep for small businesses. Being aware of all the possible deductions you can take advantage of will go a long way in saving you money come tax season. This is where organization comes into play. Keeping detailed records of your purchases throughout the year will make deducting as much as you can so much easier.
Office supplies, client or employee entertainment, vehicle expenses (if you use your car for business), professional services like tax prep or software, and more can all be deducted from your taxes.
Tax Prep for Small Businesses
Tax prep for small businesses is complicated and time consuming, especially if it’s your first time or there are parts of tax prep you’ve procrastinated on. Banks, Finley, White & Co. has you covered. We specialize in everything small business, from tax prep and advice to accounting and audit services. Make sure your business is in good hands this tax season—get in touch with us today!