The new year just started, but that doesn’t mean it’s too early to start thinking about tax season, especially if you’re a small business. If you’re ahead of your game and want to get a head start on your 2019 taxes, here are some things to keep in mind.
If you need professional help to make sure that you get the highest tax return possible, get in touch with Mike Savage at Savage Financial. Mike is a financial consultant and has been helping residents and business owners with their finances since 1989.
Whether you’re a landscaper or a dentist, nearly every purchase you make can be deducted from your taxable income. Keep in mind that there may be deductions that only apply to certain business entities, so consider working with a financial advisor who will know which purchases you can and cannot deduct.
Deduct the Home Office
Is your business run out of your home? If so, then there are certain expenses that can be deducted. These include things like insurance, mortgage interest payments, repairs, and utilities. However, don’t just blindly deduct these expenses; you need to determine the percentage that goes toward the business, and how much is actually for the home.
If you purchased a large printer for your company, you can treat it as a business expense and deduct the full purchase price from your gross income. If you lease equipment, you can end up saving a considerable amount of money, but you have to file a Form 4562 to elect it. If you have questions about what qualifies, contact a financial consultant.
Are you planning on attending a trade show to promote your small business? If you need to rent a car, stay in a hotel, or eat out, these expenses can be deducted on your taxes. The trade show fees can also be deducted if it directly relates to your business. Travel and other client expenses can generally be deducted, but only 50 percent of the cost for client meals can be deducted.
When you established your company, did you structure it as a Sole Proprietorship, Partnership, LLC, S Corporation, or a Corporation? How you file your taxes will depend on the structure of your business. Learn more about each type of entity by contacting Mike Savage.
If you are self-employed, you may need to pay self-employment tax, which includes Social Security and Medicare taxes. When you’re planning your income and expenses, keep these taxes in mind to prevent a significant tax bill.
Did you hire an employee from a certain target group? Do you have a local business that provides access to people with disabilities? Did you purchase an alternative motor vehicle? These are just a few of the business tax credits that may be available to you if you qualify. Ask your financial advisor to learn more.
If you receive income on December 31st, you can defer it so that it doesn’t count until the next year. This can be beneficial if your business’s income levels vary from year to year.
Tax season is something that not many people look forward to, except for maybe accountants and financial consultants. If you need help getting organized before you need to file 2019 business taxes, get in touch with Mike Savage at Savage Financial.
While we are familiar with tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.