The holiday season is over, we have prepared all the necessary year end forms & now our minds turn to Tax Season. As small business owners this task, among all the others, can seem a bit much. Here are 5 tips to help in preparation for this year’s Tax Season & many more.
- Don’t mix business with pleasure – We have all heard that before. When it comes to your business finances that is very true. Personal expenses that you claim as a business expense are analyzed by the IRS and can create more issues than you think. Co-mingling your business & personal funds pierce the corporate vail. Which can mean that business audit now includes your personal records as well. You should always maintain separate bank accounts and credit cards for your business.
- Record keeping is key – Proper record keeping can reduce your bill from your CPA as well as ensure your taxes are filed correctly & to your best benefit. Keep track of receipts for deductions as these are also needed in times of Audits.
- Don’t make mistakes that could really cost you…an audit, to be seen as non-compliance or even penalties and back taxes. – Be sure you are classifying your Employees & Independent Contractors correctly, there is a big difference in the eyes of the IRS. If you have a home based business be sure you qualify & that you know which deductions you can & can’t take.
- Get your credits – Be sure you are taking advantage of all tax credits available to you. From the Small Business Jobs Act to the Affordable Care Act there are still some small business tax credits to utilize. For example, the Affordable Care Act allows for tax credits to help small businesses cover some of their cost in health care. For 2014 the tax credit increased to 50%.
- Provide & update – If your tax professional sends you a tax organizer we recommend you fill it out & send it back. This allows your tax professional to be sure they have all the right answers. Schedule a tax planning meeting to discuss not only your current filing year situation, but plans for the future such as succession planning.
We of course recommend you work with a tax professional for the best results, but these are things you as a small business owner can do or should know. We wish you happy prepping & us a happy tax season. If you have any questions or would like to speak to one of our tax professionals please feel free to contact us, we are here to help.
For additional information, tax tips and current year tax deductions visit:
http://www.irs.gov/uac/Tax-Changes-for-Small-Businesses or
https://www.sba.gov/tools/search-result-page?cx=012149749304426494285%3Avl4bn0plkpq&cof=FORID%3A11&ie=UTF-8&Q=tax%20credits%20for%202014&btnG=Search