Business tax deductions work by lowering your taxable income, thereby lowering the amount of tax you owe toward your tax return. In order to claim the most deductions possible carefully review this list of deductions to see if they apply to your business, then reach out to your financial planner or tax consultant for clarity with accurate bookkeeping records.
Entrepreneurs, freelancers, and small businesses are allowed to write off a range of business expenses when filing their income tax. These expenses include:
- Startup Expenses
- Business associated travel
- Advertising and Promotion
- Business phone and internet
- Business Insurance
- Health Insurance premiums
- Home Office Expenses
- Office Supplies and related expenses
- Business Meals
- Work-related car use including maintenance
- Business Interest and Bank Fees
- Foreign Earned Income Exclusion
- Interest on Loans
- Real Estate Tax
- Professional Service and Consulting Fees
- Salaries, Benefits, Vacation Pay to employees
- Moving Expenses
- Home Energy Credits
- Client and Employee Entertainment
Personal Tax Deductions for Business Owners
Business owners are able to claim their qualified philanthropic deductions on Form 1040 Schedule A attachment.
Child and dependent care expenses
If you pay someone for childcare or a codependent member, you may be able to claim the Child and Dependent Care Credit. Refer to IRS Publication 503 regarding limits and form requirements.
Depending on the retirement plan, business owners who contribute only to their own retirement funds can claim the deduction on Schedule 1 attached to their Form 1040.
Health care expenses
Out-of-pocket medical costs, like co-pays and prescription costs, can be deducted like the health plan premium and should be itemized on Schedule A. A Self-employed business owner to itemize and deduct health insurance premiums for themselves, their spouse, and dependents.
How Can I Benefit From A 100 Percent Tax Deduction?
100% tax deductions are business expenses of which 100 percent of it can be claimed on the owners’ income taxes. These deductions can result from:
- Annual business phone bills
- Health premiums for the self-employed
- Up to $25 per person per year as gifts to employees and clients
- Office equipment, like computers, printers, and scanners
- Business travel and its associated costs, like car rentals, hotels, etc
- Furniture purchased entirely for office use in the year of purchase
What Do I Do Next?
Contact me to identify which deductions you can claim, which forms you require, timelines, deadlines, and anything else related to Financial Management and Tax Planning.
Learn More Here
As leaders, this is an opportunity to build your team’s morale through motivation and encouragement. You must function in a way that highlights collective good and group interests. This method of leadership increases organizational performance as well as job performance and is the most required right now.
Being a transformational leader means you have to thoroughly consider how your team feels about themselves while assessing their newfound strengths and weaknesses. Surely you have evaluated their worth and respect for the company to maximum sustainability. If your method of inspiring stems from a charismatic expression of persuasiveness and mobilizes your team into progressive actions, you are more than like building a powerhouse of influential individuals who will be prepared and prone to dominate their industry in the upcoming months. Your company, product, or service will be established as a trustworthy business model that can withstand adversities.
The best thing you can do as a transformational leader is to operate from a foundation of mission and emergence in order to impress your teams with the goals and mantras that will engage them to accomplish specific objectives while operating from a place of influence. Your intellect and ability to relate to feedback will allow you to read individual behaviors and understand the needs of subordinates to not only show them appreciation by meeting their reasonable requirements above and beyond the protocol to get tasks done efficiently, effectively, and most of all enthusiastically. Such a leader will use the confidence of his people to obtain better overall results not just now but in the future.
To devise a leadership plan that will guide your organization’s mission and support your desire to succeed, reach out to Jeffrey Levine today for a free consultation to discuss your objectives.
A business owner should be clear on the types of taxes they are responsible for. Primarily, business structure determines what types of taxes will be paid. Here is a synopsis of four primary taxes that may have to be reconciled at different stages of the year:
Income tax is used to bill individuals for their wages or investment income, in proportion to their level of net income. Partnerships file an information return, while all other businesses must file annual returns.
Employers have the following tax obligations:
• Social security and Medicare taxes
• Federal income tax withholding from employee wages
• Federal unemployment tax (FUTA)
Employers must accurately deposit and report federal income taxes, federal unemployment taxes, social security taxes, and Medicare taxes. Employers must select between two deposit schedules at the beginning of every calendar year. They can either deposit federal taxes monthly or semi-weekly. FUTA Tax deposits are normally due within the month after each quarter. There are also quarterly reporting requirements for federal income taxes, social security, and Medicare taxes.
Self Employment Tax
Self–employment tax, or SE tax, is a Social Security and Medicare tax paid by individuals who work for themselves or own their own business.
Excise taxes are particular to goods and products like petroleum, alcohol, tobacco, firearms but there is a broad range of categories and forms that encompass the qualifications for submitting excise tax to the agency of authority.
Remember a company with up to date and consistent tax preparation is much more valuable in case your long term plans are to sell your business. In order to avoid mistakes and meet critical deadlines, contact a tax consultant early on to secure compliance with the agencies involved.
If you require immediate assistance visit my website at JeffreyLevine.Solutions to schedule a free consultation regarding your tax concerns.
When you have a business, there needs to be a complete understanding of the tax authorities your entity is entitled to pay. Being uninformed can cost you time, money, or even your business. In addition to being accountable to the IRS for income taxes, your district, locality, county, and state agencies may require sales, property, payroll, local, excise, self-employment, and other specialty taxes like unemployment.”
Tax returns can be complicated for those with minimum experience, so it is extremely important to consult with a professional to prevent errors, keep costs low, and avoid the audit process.
Proper tax planning allows you and your team to consider quarterly and annual potential tax commitments and requirements, so the company claims the proper deductions that it is eligible for and prevents commingling. An informed business tax planner supports the bottom line so the company’s attention can be geared toward producing quality products, developing integral relationships, and implementing marketing strategies that boost and support the business’ objectives.
With the numerous tasks that come with operating a business, it’s not astonishing that business taxes aren’t at the top of the list of priorities for many proprietors. You can avoid making common tax mistakes by allowing a professional in tax planning to provide expertise and tax advice that prioritizes your company’s financial and compliance needs.
Contact me for your virtual or hands-on business tax consultation at JeffreyLevine.Solutions today!
This corporate tax preparation fundamental breakdown offers seventeen straightforward tips on handling your business taxes while remaining in compliance with the rules or regulations from the IRS, state and local tax authorities.
1. Mark your calendar for various tax-related actions
• If your small business is set up as an S corporation or a partnership, your tax return is generally due on March 15.
• Small businesses that are sole proprietorships, single-member limited liability companies, or C corporations have their tax deadline on April 15 , usually the same as individual tax returns.
2. Retrieve all tax-related forms relevant to your corporate structure
• Sole proprietorships use Form 1040, especially Schedule C, to report business income and expenses.
• C corporations file their taxes on Form 1120.
• S corporations use a special Form 1120-S from the IRS.
• Partnerships must complete Form 1065 and then provide individual partner information on Schedule K-1.
3. Gather all income-related business records for the relevant tax year
Some records may include:
• Gross receipts from sales of goods or services.
• Returns, or refund invoices
• Documentation regarding any interest or investment income accrued by the company
4. Collect documentation for business-related expenditures including:
• Receipts for insurance, overhead costs, supplies, utilities, and professional fees
• Documentation regarding home office deduction, transportation, meals, entertainment, and business health insurance expenses.
5. Send out any required information returns, and ensure you receive the ones you need
• Form W-2 for employees or Form 1099-MISC for independent contractors are required to be sent out by a specific deadline
• paying interest on loans, rent on rental property, or fees for services provided by outside professionals may also need to be distributed, requested, or recorded
6. File any extensions before the due date to avoid interests and penalties.
• Business set up as sole proprietors, single-member LLCs, and C corporations can receive extensions for up to six month through Oct. 15.• Extensions for partnerships and S corporations are up through Sept. 15.
• State and federal tax rules differ, so both agencies should be consulted for clarification
7. Compare the previous years’ taxes with the current year to determine if you are reaching your company’s tax planning goals
• Avoid overpaying taxes as your company can accrue debt later from the lack of liquidity
• Avoid underpaying as that can result in unnecessary interest payments and penalties fees
Deductions to Completely Avoid or That May Not Be Counted as Deductible
8. The small business loan can’t be deducted, but the purchases can be.
9. Clothing that is worn outside of the scope of work
10. Contributing your time to charity
11. Membership Dues
12. Accreditation Fees
13. Federal Tax Payments
14. Life and Disability Insurance Premiums
16. Restitutions or Court Fees
17. Your salary
Every business requires a high-level look at its tax picture to create the supporting schedules and attachments required to remain in compliance with state and federal tax regulations.
To discuss your business’s complex set of tax preparation or planning needs contact Jeffrey Levine, Tax Planner today for a consultation.