Get the most out of your return with these helpful tax strategies for business. If you run a company, you know the importance of managing your money. Every penny counts, and you want to make sure you don’t overpay the IRS. Unfortunately, few business owners know how to streamline their taxes and simplify their returns. Utilizing these strategies may reduce your overall tax burden and lift a huge weight from your shoulders.
Itemize Your Deductions throughout the Year
What expenses has your company incurred so far this year? If you can’t find the answer in less than five minutes, you need to reevaluate how you itemize your deductions. Every company can deduct certain expenses, depending on the nature of your business. Vehicle mileage, client meals, travel expenses, and moving costs may all save you a bundle come tax season. Make sure you meticulously record and track every business expense as it happens.
Long gone are the days of storing business receipts in a shoebox. Today, you have access to some of the best record-keeping software available. It only takes a few minutes each day to input any expenses. You can even scan receipts and save them in a secure folder. When tax season rolls around, you won’t have to scramble to gather all of your documents. Staying organized will save you save time, and you won’t worry about forgetting any major deductions.
Send the IRS a Check Every Quarter
How often do you mail a check to the IRS? The most successful business owners don’t wait until April to make a payment. While not required, the IRS recommends that small businesses make estimated quarterly payments. But why would you want to send them money more than once a year? It may surprise you to learn that quarterly payments can help you lower your total tax burden.
Companies who choose to forgo paying each quarter must pay a tax penalty in April. This penalty may vary from a few dollars to several thousand, depending on your total revenue. On the other hand, if you send the IRS money every three months, you don’t have to worry about coming up with a bulk payment at once. You can also adjust your expenses if you notice a trend in your revenue.
Choose a Better Business Structure
If your company operates as a sole proprietorship, you may end up paying more in taxes. And, if something happens to you, the entire company dissolves instantly. You may also lose your personal property if something goes wrong with your business. Consider operating under a different business structure to not only save money but to also protect your company.
Many small businesses decide to incorporate or become an LLC (Limited Liability Corporation). As an LLC, your company can take advantage of many tax savings. Even though your tax rate may stay the same after you incorporate, you’ll qualify for several additional deductions. Corporations can deduct insurance premiums, salaries, payroll taxes, and much more. And as a business owner, you know that every little bit helps.
Hire a Business Tax Preparation Expert
No business owner should ever attempt to file their own taxes. There are just too many risks involved. If you input something wrong, you may find yourself with an audit on your hands. Incompass Tax, Estate & Business Solutions will work with you to file your taxes on time throughout the year. We will make sure our company complies with all the current business laws. Our team will reduce the risk of errors, leaving you with a sense of security. Schedule an appointment to find out which tax strategies for business are right for your company.