Big Savings, Small Taxes: Friendly Advises for Small Business Owners

Tax PlanningSmall businesses value every cent they save, especially when they have to keep up with all the expenses, such as taxes. It doesn’t matter if your business in Utah is a corporation or partnership for there are ways to reduce liability. Proper tax planning will allow you to put those tax savings to good use by expanding your business and rewarding your employees.

Advice # 1: Purchase to Save

Every time you get a new software, technology, equipment and furniture for your company, make sure that your team saves the receipts. Instruct them to always record all purchases made including the date and price. Keep tabs on everything to confirm expenses when claiming for a tax return.

For tax years starting 2015, the Internal Revenue Service stated in Section 179 that the maximum expense deduction is USD 500,000 depending on the type of property and its profitability status.

Advice # 2: Always the Season for Rewards

To get the most of your business finances, remember that deductible expenses include company donations of property, supplies and money. This includes payroll taxes and bonuses given to officers, partners and employees.

Advice # 3: Business will Sometimes be Personal

Businesses that use their own home have the advantage of deducting depreciation, mortgage interest, repairs, utilities and insurance. Meanwhile, partnerships and corporations can also subtract actual expenses whenever the employees use their vehicle for business purposes. This also includes costs for parking fees, maintenance and fuel, as well as, vehicle depreciation and loan interest.

Ensure that your detailed mileage records have the purpose of the trip, parking, tolls, total miles and date to get your expenses back.

Small business owners have plenty of opportunities to reduce tax payments all year round if they know what to look for. Bookmark this page on your browser and use it as a guide the next time you do your taxes.