Dec 26 Small Business Tax Advice
We’re nearing the end of the calendar year. For many people, as the year comes to a close, their calendar and responsibilities begin to clear up. Many of these people consider the winter months at the end of the year as a time to relax and enjoy the holiday season. Many take time off toward the end of the year; the furthest thing from their mind is work. For anyone who owns a business or works in certain areas of the financial industry, however, the end of the year can be one of the most stressful times of the year. There are several reasons this is the case. For one, the fiscal year is coming to a close and many are making sure all projections and goals for both the quarter and the year are met. Another reason the end of the year can be stressful for business owners and financial professionals is, of course, tax season. While tax time may not officially begin until the beginning of the new calendar year, the end of the year is just as important when it comes to getting financially organized and making the necessary tax preparations. The end of the year can be a particularly stressful time for small business owners. Successful tax preparation and submission for small businesses can be crucial to the long-term success and sustainability of a small business. There is a lot to think about when it comes to small businesses and taxes, so contact a company offering Clifton NJ business advisory services for more information. To get started, here is a look at one aspect of small business tax prep: deductions.
Deductions are a big aspect of taxes that small businesses cannot afford to make a mistake on. One common deduction claimed by small businesses (and those who are self-employed) is a “home office” deduction. This deduction applies, of course, if you work from home. To figure out how much this deduction would be, simply measure the area in which you work and divide that number by the square footage of your home. Use whatever number you come up with as a percentage, and claim that percentage of your rent, mortgage or other home expenses as a home office deduction. It is important to remember that in order to claim this deduction, your home office must be distinct from your living area. This could mean it is a full room of its own or it could be a section of a larger room or space. In either case, it should be clear where the workspace ends and the rest of the house begins. This can be as simple as making it a priority throughout the year to not use wherever you designate your office to be for anything other than work.
Technology And Travel Deductions
Some other common small business deductions are related to technology and travel. Businesses may deduct business-related technology purchases. Technology hardware like computers and printers obviously falls under this category, but so does business-related software. All of these items and more—even vehicles—are deductible if they are used only for business purposes. Writing off travel expenses carries this same stipulation: it must be business related. Businesses (and again, those who are self-employed) may deduct travel expenses like car rentals and mileage. Food is also deductible on a business-related trip or if you’re taking a client out for a meal, but you may only deduct 50% of these costs.
There are many more tax tips out there just related to deductions, so be sure and speak with a business tax professional if you have questions or concerns.