Small Business Tax Strategies

Just because March 15th has come and gone, that doesn’t mean you should stop thinking about business taxes.

Be sure to track itemized deductions and fixed assets

Small and overlooked items like office supplies, equipment and even software can become reductions to your taxes as itemized deductions with IRS code Section 179. Don’t overlook the computers, printers, licensed software, delivery trucks, etc... Keep track of these items during the year to help you stay organized when it comes time to list them.

Keep your records organized

Find a filing system that works for you. Be sure to file your receipts as soon as possible after making a purchase to ensure your taxes are filed accurately and that you have paperwork if needed. You might want to consider e-form filers. The IRS has a listing of approved e-form filers who provide web-based services and firms near your area to help store tax information. Many local accountants offer these services. Consider a smartphone app to help simplify record keeping as well.

Utilize the Small Business Jobs Act Tax provisions

If you are looking for great savings for your business, take advantage of the Small Business Jobs Act of 2010 signed by President Obama. This law has more than a dozen provisions decreasing tax burdens for small businesses.

Keep contractor names and addresses up to date

Obtain an updated W-9 tax ID form when you work with a contractor. Verify the names and addresses of all contractors you have worked with throughout the year and note the individual payments and total you paid each contractor. Double check with your accountant to confirm your expenses are being tracked properly. Increasing pressure in Congress toward more uniform 1099 reporting of contractor payments makes accurate record keeping critical. Payments to contractors before obtaining information is not advised. Failure to obtain this information can, under audit, disallow the deduction of these expenses. Save contractor information allowing next year’s filing to be less stressful.

Post your questions here, email me at catkinsoncpa@optonline.net, or call (631) 868-3659. To learn more about me please visit my website: www.christopheratkinsoncpa.com or www.bayportaccountant.com.

As always these tips are for contemplation only and are not considered advice or covered opinions. Please consult your tax professional for specific help on your particular set of circumstances.