Now's the time to start collecting paperwork for the end of year tax rush
Well, we're halfway through the year. And being honest here, most people don't tend to think about taxes until it is nearly time to file. While you may be always able to get the proper paperwork together in time to file your taxes, waiting until the last minute may not afford you the time you need to take advantage of all the deductions available to your business. Deductions reduce the amount of taxes you pay; every dollar you don't need to pay in tax is potentially more profit for your business. Start organizing you paperwork early, seek competent advice from your tax professional, and make sure you take a look at the following:
- Employee Expenses. The government allows you to deduct the cost of compensating your employees, including their salaries, health insurance and fringe benefits. You can even deduct for the cost of training your employees. Vacation pay, sick pay, disability and retirement plans are also tax deductible.
- Operating Expenses. The cost of maintaining and operating the office, including general expenses, are tax deductible for small businesses. Make sure you are deducting rent, the cost of supplies and materials, and utilities. If you run your business from your home you will be able to deduct some expenses, provided you have a space set up exclusively for the business.
- Automobile Expenses. Expenses related to cars, trucks, vans, buses or any other vehicle used for your business are also deductible. Only business use is deductible, not personal.
- Marketing Expenses. Certain expenses related to promoting your business are also deductible. Business meals or expenses incurred when entertaining clients, customers or employees may be deducted in part from your taxes.
- Other Expenses. Businesses are able to deduct the first $5,000 related to starting up your small business. Amounts over that can be deducted in equal amounts over the next 15 years. You can also deduct costs associated with investigating a business, doing research and development, and some taxes that pertain to your business. Charitable contributions, tax credits, and moving expenses are all also deductible.
Doing the research will pay off. There is a long list of things that you can deduct from your taxes. Have a tax professional help you figure out what items you can deduct, and keep good records throughout the course of the year to make such deductions easy to make. Deductions can help your business be in a better position to continue operating year after year, so always be on the lookout for ones you can claim.
