Tax season is a stressful time for many business owners. Here are some tips that your business can take advantage of to save money and reduce stress during the dreaded tax season.
To run your business, you’ll likely spend money on expenses such as utilities, advertising, repairs, and office supplies. All of these expenses can be deducted as capital expenses. Be sure to review and list all of them correctly.
If you use a car for business, you can deduct the costs for using it on the road. You can use the Actual Expenses method, which keeps track of and deducts all business-related expenses. You could also use the Standard Mileage rate method, which deducts an amount for miles that you drive, along with any parking fees. If you are using a new car for business, you will receive a larger tax break using the Actual Expense Method. You can also deduct depreciation on the car. If the vehicle is for both business and personal use, only the business portion will receive a tax break.
Any fees you pay to lawyers for consultants for your business can be deducted. If the work is regarding the future, they will be deducted over the extended life of the benefit that you received from the lawyer or consultant.
Your business may receive a tax break for your traveling expenses. Expenses such as plane fare, taxis, lodging, faxes, and telephone calls are eligible for deduction.
If you finance any business purchases through credit, the interest and carrying charges are tax deductible. If you take out a personal loan and use the funds for your business, you can also receive a tax break.
Your business may receive a tax break for the full cost of some assets. You may be able to deduct the annual threshold amount for the cost of equipment and other assets. Your business may also be able to take advantage of a depreciation deduction. You can depreciate an additional percentage of the adjusted basis of any new property in its first year of service.
Any software that is bought for the business must be depreciated over a three-year span. However, if the software comes with a computer, it will be treated as hardware and depreciated over a longer time span.
Your business can also receive a tax break through your taxes. Any taxes occurred through operating a business are deductible. If your business pays employment taxes, the employer’s share is a deductible business expense. Be sure to be on the lookout for other ways to save and find money for your company. You can find lost money through a free unclaimed money search at your local bank or money service, and if you spend and save wisely, the rest is cake.