Are you ready to learn some tax planning tips for your business?
Calculating annual taxes can be challenging enough for everyday individuals, but these challenges are multiplied for small business owners.
In 2020, the IRS announced that it would increase tax audits of small businesses by 50%, and many small businesses simply don’t have the resources to ensure they are protected. Conversely, small business owners and self-employed individuals often overlook valuable tax deductions and credits, which can boost their bottom line come tax time.
The good news is that when it comes to annual taxes, small business owners don’t have to do it alone, and there are exceptional small business accounting services available that can do the heavy lifting.
In addition, by understanding the importance of tax planning and taking a few initial steps, you can set the stage for more profitable and stress-free years ahead when tax season rolls around.
Connect with an Experienced Small Business Accountant
At Saddock Advisory, we can work with you to create individualized tax planning and management that works with your unique business operations and, more importantly, with your long-term financial goals.
In the meantime, here are a few simple things you can do to get the ball rolling on more successful tax planning in the future.
Find a Tracking System that Works for You
Business owners are busy individuals and don’t have time to leaf through every receipt, credit, or expense that flows through their operations on a daily basis. That’s why it’s essential to have an easy tracking system that can be efficiently used for routine record keeping. You can even do something as simple as creating an Excel spreadsheet. Just make sure you don’t throw those receipts away for three years – you’ll need them just in case an audit occurs in the future.
Consider All Your Expenses and Keep Track of Everything – Even the Unsubstantial Items
Small business owners often overlook a wide variety of business expenses. However, your small business accountant will certainly notice when it comes to minimizing your taxes.
For example, if you conduct any sort of travel for your business, virtually every step of your trip can be deducted, including your airline tickets or gas costs, parking fees, hotel accommodations, meals, and even the cost to attend networking events.
In addition, routine expenses like your business’ rent or mortgage, utilities, internet connection, and even your cell phone can be used if they are instrumental for your work. In some cases, business owners can even deduct repairs or improvements to their home, (as well as utilities and other expenses). These all qualify only if they have a designated home office space to conduct business.
This is just a sample of some ways that business owners can save money when it comes to taxes, and there are many more. So, keep all of those receipts and expenses handy – many business owners are surprised to discover that when it comes to annual taxes, they often leave money on the table.
Set Up a Retirement Account
One of the best ways to plan for your future and save on taxes is to maximize your retirement contributions. There may be limitations to how much you can contribute per year. However, an experienced small business accountant will help gauge how much of your income and profits should be delegated to your savings while monitoring the expenses you’ll need to conduct day-to-day operations.
Receive Tax Credits from Making Charitable Contributions
Donating or contributing to a local charity or charitable event is a great way to create goodwill and positive publicity in the community. Additionally, it can also save on your annual taxes. Consider the monetary donations you give to a charity, and the goods, services, or labor you supply to a qualifying nonprofit organization. All these aspects of charitable contributions can likely be deducted at the end of the year.
Make Sure You Have Smart Financial Assistance Every Step of the Way
From your initial business startup (which can lead to instant deductions) to your eventual retirement, you’ll need an experienced partner to lead you through every tax season. At Saddock Advisory, we take an individualized approach to all our clients, with an eye on the ever-changing tax laws and how your business may be impacted.
When it comes to managing your finances, in addition to overseeing the success of your everyday operations, you need an expert partner. Reach out to the professionals at Saddock Advisory today for thorough oversight and financial planning that will help bolster your business and achieve your long-term financial goals.