Year-end tax tips can help save you a lot of headache next tax season. If you struggle with tax filing, you’re not alone. Every year, as many as 33% of Americans file their taxes late. Some just forget, others struggle to get things together in time because they left it to the last minute, and others are scrambling to make sure they have everything they need to keep their bill low. It’s not too late to make sure you have…
What’s the goal of every business? To make a profit, of course! A business can generate more profit by increasing revenue, managing or reducing expenses, and optimizing tax deductions. These are our recommended best and worst practices for monitoring and deducting business expenses: Understanding Business Expenses Expenses are the costs that a company incurs in the process of generating revenue. Importantly, businesses can take properly recorded tax deductions on their income tax returns, provided that the deductions meet IRS guidelines. Deductions fall in three…
It’s one of the most difficult undertakings to embark on alone. Especially when looking at the statistics, starting a business is a risky venture. This is especially true if you’re financially unprepared. One of the biggest challenges to more than 30% of small business owners is capital! Depending on the business, starting costs and the required capital will vary massively. Small business costs in particular can really take the wind out of your sails going forward. How Much Does Starting a Business…
As a small business owner with a lot on your plate, the last thing you need is to make any tax filing mistakes that could bring the IRS to your doorstep. Often getting audited by the IRS isn’t always the result of intentional acts. Here are five of the most common tax filing mistakes that are likely to get you a dreaded letter from the IRS asking for more information: 1. Under-Reporting Income Whether you are a freelancer, a brick-and-mortar…
There’s nothing more rewarding than starting and running your own business. But, the particulars of having to keep track of finances and pay taxes can put a damper on your enthusiasm. If you’re self-employed and earn more than $400 in a tax year, you are probably required to pay a combination of income tax and self-employment tax. Here is what you need to know. Who is Considered Self-Employed? For tax purposes, the IRS considers a person as “self-employed” if they…
On July 15, 2021, the IRS began making Child Tax Credit payments to many Americans. These payments are part of the $1.9 trillion American Rescue Plan Act (ARPA) passed in March 2021. They are meant to give much-needed relief to many families suffering due to the current global health crisis. The tax credit will also help small businesses and their owners. What is the Child Tax Credit? The first Child Tax Credit was created in 1997 as a means to…
You’re probably aware that the Internal Revenue Service has granted individuals and certain businesses an extension to filing their tax returns for 2020. But does it apply to your small business? The short answer is, it depends. The IRS has indeed extended the filing deadline for 2020 tax returns from Apr 15, 2021 to May 17, 2021. However, for businesses, the extension only applies to businesses classified as sole proprietorships and single owner LLCs. All other business structures are still…
Owning a small business entitles you to numerous tax deductions and credits. To maximize your tax savings, however, you need to understand the rules, keep accurate records, and stay up to date on changing tax codes and regulations. Most small business owners don’t have extra time to devote to these endeavors, so hiring a tax expert is a good investment. Working with a certified tax professional or CPA will ensure your business is taking full advantage of the deductions, write-offs,…
Small business owners can write off many routine business expenses as tax deductions. Business tax deductions work by lowering your taxable income, thereby reducing the amount of tax you owe. According to the Internal Revenue Service (IRS), no expense can be deductible unless it is both “ordinary and necessary.” An ordinary expense is one that’s common and accepted in your type of business. For example, if you own a restaurant, the cost of food and other restaurant supplies are an…
Businesses throughout the United States have been negatively impacted by the COVID-19 pandemic. Businesses of all sizes have been forced to close, reduce hours of operation, or lay off employees. In response to these concerns, several state and federal programs were implemented to provide relief to both businesses and individuals. In addition, a presidential order was issued to allow employers to defer certain payroll taxes. Payroll Tax Deferral Programs It’s important to understand that there are two different types of…
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