Many small businesses simply can’t afford an in-house accounting department, so come tax time when having to get all of their books and paperwork in line, things can get a little hectic. In order to make tax preparation go as smoothly as possible, there are a few things you can do to help the process along…
Know Your Tax Deductions
President Trump’s tax changes did have certain benefits for businesses. For instance, there is now a corporate rate deduction of 21%. Not to mention, 95% of businesses will be impacted by the pass-through business deduction. And of course, there are no longer penalties in regard to health insurance.
Beyond the tax law changes, small business owners need to be able to look at any and all associated costs and understand what they can and cannot deduct. You’d be surprised at how many entrepreneurs leave critical deductions out. If you work from home, you will be eligible for a home office deduction. And what about mileage? Are you tracking it carefully? You can also take off for cell phone, Wi-Fi and internet usage. Talking to a tax professional can certainly give you more insight into what you might be missing as far as your business deductions. This, consequently, could save you a great deal when all is said and done.
Extended Filing Time
Many business owners often consider filing an extension—especially if the spring happens to be slow and cash is not coming in as quickly as they hoped it would. However, you do have to keep in mind that this does not extend your playing time. You need to pay what you owe, otherwise, you could actually end up paying more. So when you file that extension also include what you owe for 2019 even if you’re not filing the return in April.
What Do You Need…
Often taxes, particularly business taxes, can seem confusing. This is why working with a certified tax professional can really help the situation. They know the tax laws, they understand the rules and regulations and they can guide you through the process.