Small business owner read and be savvy with taxation

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As a small business owner, you struggle for every penny by buying you stuff and selling your products. Paying payroll and managing your employees. Paying the bill and collecting credits, fighting your business life on a daily base. Once a year you have to struggle with tax filing. We will review what we can do to make sure that we will not pay more than we should pay. One of the typical problems of small business owners is the need to know by themselves about all the aspects of business, mostly they dominate the main things of their industry and fail to dominate some administrative areas like taxation. As a proof of it, you can read this artificial from Forbes. Stop Overpaying On Taxes, by Garrett B. Gunderson you have to run your business, you are 110% busy doing it, but you must take a moment to see about the tax-filing and the tax strategy for your small business. A dollar paid is a dollar then was gone forever. It is not an invested money that can come back.

Managing your tax return is important for your success

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Below are our ten suggestion for tax saving by yourself for 2018 tax-year.

1. A tax filing software or a professional tax consultant.

Many people are yet suffering from computer-phobia, they better get a flush and blood consultant for tax filing. Those that are computer friendly can buy a software that will help them file taxes like a pro.

Those soft wares for tax filing are tools for organizing and filing the tax return in the easiest and most accurate way.

2. Receipts of all your expenses should be kept in organized and safe place. Do not just put them in a box and forget where you placed the box. Those are the blocks of your deduction for the tax year.

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Most of the receipts are the proofs of your expenses on goods and services that you can deduct on your tax-filing, reducing your taxable income amount. According to your business structure, you can have specific reasons for deducting from taxes. Do not save the hassle of keeping and organizing all those small pieces of paper. There are many apps for your cellphone that can scan and organize your receipts. You could use an app for sending those receipt you need to email or process by the apps that manage the tax filing. Always keep the originals in safe place.

It is better to get a refund than to pay penalties

3. One option to reduce the taxable income is to advance the retirement pay of self-employed workers.

Paying the retirement fund will postpone the tax payment on this money to the day the fund is withdrawn when you retired. If you are under 50 you can contribute $5.500, over the 50-year-old you can put $6,500 for retirement savings.

4. Home office expenses can be deducted. If you work from home you can deduct expenses the same way as if you have an office rented apart of home. Starting with office stuff, Internet service, phone bills and part of your insurance and rent or mortgage.

Tax money

5. Car expenses deduction. It is most important to calculate the percentage of the usage of your car between business and privet. You will have chosen between mileage or actual expenses on the car. You are allowed to file the better option for you to pay less tax.

6. Equipment depreciation can be managed in a savvy way by using Section 179 that allows small business to file the equipment as an expense up to $500,000. By saying business equipment, we refer to anything that the business needs to run properly, from machinery to a laptop. Section 179 Calculator To activate section 179 you need to file a Form 4562 and elect Section 179.

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7. Using some family as employees can save some money. A teenager son or nephew can do some job on the computer or do some easy job can save some tax by reducing the taxable income of the business. The FICA and FUTA for this wages can be saved.

8. There are deductions that you can use only after some years, including capital losses, Charitable contribution deductions. Keep a note of this options so when the time comes you do not forget about this deductions.

9. Old equipment becomes obsolete after a few years of use and stops making money or providing a zero ROI to your business. You need to get reed of it, but one moment before you sell it you must check what is better, to sell it or dump it. Dumping is will ordinary loss fully deductible or sell it as a capital loss. You need to check what will be better for you, see Section1231 to take the better decision.

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10. If you are eligible, you should take advantage of penalty relief. If after all this advice and your best CPA advise, you got hot with the IRS and incurred a penalty check if you can get penalty relief. Small problems like failing to file a tax return or late payment can get a penalty relief. Cases of failing because of beyond control circumstances can get penalty relief. You better try to show you made an honest mistake and convinced the IRS to allow you a penalty relief.

Do not fall into the traps of fraud refund.

A small business owner needs to know about taxation as well as all his business fields, Sales, human resources, payroll with paystubs and accounting, and organization, transportation, and financing. A multi-discipline magician is a good definition for an entrepreneur that starts a small business. team hopes that this blog helps you with the day to day struggle of managing your small business.

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