Tax day is always April 15th – besides this previous year, of course! Even though that date seems far away, it is never too early to be ready for the time of the year that everyone dreads.
Prepare yourself and your small business for next year’s tax season so it runs smoothly. Do not make these mistakes on your taxes next year.
Inaccurate income reports are a big mistake that is often made in small businesses. Do not fail to report income or accidentally over-report your income. The IRS has access to the information that you are trying to withhold. Throughout the rest of 2020, make sure that all income reports are correct by double-checking them.
Small Business Tax Deductions
Small businesses have the opportunity to claim tax deductions. By writing off certain expenses, your small business should owe less in taxes.
The IRS says that business expenses must be ordinary (common in your industry or trade) and necessary (needed to run the business). Expenses must be for business, not for personal use. Below are a few tax deductions that small business owners should keep track of.
- Car and truck expenses
- Salaries, wages, and contract labor
- Business rent
This article goes in-depth about expenses that can be considered a tax deduction.
Personal vs. Business Finances
Small business owners commonly mix up their personal and business expenses. Although it may seem easier to keep everything in your personal account, it causes problems during tax time. This might cause you to overlook a small business deduction. Avoid mixing these expenses by opening up separate accounts.
File On Time
This might seem like an easy decision, but make sure to file your taxes on time. Steer clear of problems caused by late taxes by asking for a filing extension.
PL Consulting Will Prepare You For Tax Season
We want to help small businesses in any way that we can. We hope that you can take these suggestions and implement them in your business as soon as possible.
We are experienced in all facets of tax preparation. We ensure that you consider all of your legal deductions so you realize your full tax benefit. Our comprehensive interview techniques and computerized return preparation process assure that your return is complete, correct, and presented to you promptly.
We help structure transactions to minimize the legitimate amount of tax you pay. Through careful evaluation, we help plan your tax obligations for the entire year so there are not any surprises at tax time. We can explain the tax structure so you know where your money is going.
Along with tax return preparation services, we offer a diverse range of bookkeeping and budgeting services. We are here as your business’s go-to resource when you have questions. Our services are customized to each of our clients and their business plans.