The good news is that small businesses qualify for an almost innumerable amount of deductions—however, knowing what exactly qualifies as a deduction can be difficult, and many small businesses miss out on many small deduction opportunities that could really add up in the end. To help small business owners better understand deductions, our accountants in Coral Springs offer these 5 tips for small businesses:
Coral Springs Tax Preparation Tips
#1: Be a dedicated record keeper
Keep careful records of even small expenses. Keeping receipts is important, and you should make sure you make a note on the receipt to remember what the expense was for. You can also keep track of small expenses you might not have a receipt for: postage, parking and meters, public transportation fare, office supplies, etc. It’s also a good idea to log your travel, such as start and end points, miles traveled, and other car expenses, so that you can have an exact measurement to report on your deductions.
#2: The “hard way” can really pay
The IRS has some general numbers you can plug in to generate your deductions—but by trying the different calculation methods the IRS provides, you can choose which method benefits you the most. If combined with meticulous record keeping, you could really start to see the deductions add up.
#3: Personal vs. Business expenses
Make sure you are honest, yet thorough, in dividing personal and business expenses. Oftentimes they overlap. Keeping good records will help you make that division.
#4: Learn about tax-deductible opportunities
What is tax deductible and what isn’t? The IRS does not provide a direct list of possible deductions, but there are many websites that give lists of suggestions, and of course, you can always meet with a CPA to get more information.
Tip #5:Take it to a professional
Work with an accountant to ensure you are only taking legitimate deductions, while also maximizing them. The accountant will know where you can find hidden deduction opportunities, give you record-keeping ideas, and help you chart your course for the future.
Implementing these tips will help you get off to a strong start on your taxes. Meet with one of our accountants in Coral Springs or an accountant in your area for more tax-time tips.
Andrews June 23rd, 2016