Tax Advice for Small Businesses – What You Need to Know

It’s tax season! We know running a business is tough. If you’re a small business owner, freelancer, or taking side gigs, you know how complicated taxes can get. The IRS has been making changes and accounting for many types of online trading or business. Thus, filing taxes every year has become more complex than it used to be.

With the right preparation, you can indulge in some tax-saving opportunities. We compiled the best advice for small businesses.

1. Save Every Receipt

Every purchase, anything related to your business, should be documented. By not reporting these purchases, you’re missing out on tax deductibles. You’d be surprised about how many things can lead to deductions, just don’t stretch the truth!

If you’re having trouble thinking about what can be applied to your taxes, here are some common tax deductions for small businesses:

• Mileage: Check for things such as gas, repairs, miles, and more when calculating the cost.
• Home Office: If you work remotely, you can take account of any repairs, mortgage, utilities and more.
• Wages: Any wage, salary, or paid time off can count as long as your employee isn’t the sole proprietor, LLC member, or business partner.
• Supplies: These are your most basic expenses such as office tools, shipping materials, and more.
• Furniture and Equipment: Any home decor or tool that you purchased.
• Advertising: Social media campaigns, logos, digital marketing platform costs, website upkeep and more all apply.
• Travel: If you travel for work, take into account the cost of your plane tickets, hotels, and such.
• Insurance: If you have insurance for your business, you can also deduct this from your taxes.
• Legal or professional fees: Any payment made towards lawyers, accountants, and other professionals can also be deducted.

2. Check Your Eligibility for Section 179

Small businesses can deduct their entire property depending on what falls under section 179 as claimed by the IRS. It can mount up from $500,000 to $1,000,000 of eligible business property. Anything used for production or manufacturing, buildings that shelter farm animals, and facilities all apply. What is excluded is land, investment property, buildings that store AC or heating units, and buildings that provide lodging.

3. Separate Your Business and Personal Account

The IRS can search your accounts if they find anything folly. If they find personal purchases on your reported business, they can scour through your personal accounts. It’s important to separate the two when you file taxes. Not only will you report more accurately, but it’s also organized.

4. Donate to Charity

Making charitable donations under your business can look good for its reputation – but it can also deduct your taxes as well. If you have donated cash, merchandise, or other items to a charity, these can all be reported. Ask the charity for a receipt for proof of donation.

5. Hire an Accountant

Accountants can help manage your money or budget, but some are willing to help file your taxes. If you prefer other options, there are professionals out there who can help. This is a great way to monitor your spending and profits.

Need extra tax advice and other financial support services? Check out the extra income section on the JobGet app now!