Completing your small business taxes for 2014 may already be in your rear view mirror, but the stress of taking time out of your business to do them may be lingering. Even if you have filed an extension, there’s always next year. Moreover, you may be surprised to hear this, but this is the time to start thinking about next year’s taxes.
These tax tips for small business owners can help even if you have already filed and discovered an opportunity, which you can take advantage of by filing an amended return. These tips can ensure you get to maximize your refund this year or next:
File an extension. Filing an extension is easily done online and gives you another six months to calculate all possible deductions. However, you do need to estimate any tax liability on the extension request form and pay it by April 15, which you can also do online. By estimating and paying your 2014 taxes, you avoid interest (3% per year, compounded daily) and late payment (0.5% per month) penalties.
Get help. Small business owners rarely have enough time to devote to doing the necessary work to prepare their taxes properly. Getting the help of a CPA or accountant may cost you a few hundred dollars, but it is well worth it when you consider the savings they can help you recover. The time to get set up with a new CPA or accountant is now that tax time is over.
Take every possible deduction. Many small business owners are simply not aware of the many deductions available to them, including home office deductions, business startup costs, education credits, vehicle costs, capital equipment amortization, rent, business insurance, health insurance cost deductions, donations to charity, energy efficient upgrades and much more. The IRS website provides an educational section on deducting business expenses.
Check filing status. If your business is incorporated as an LLC or S-Corp, or you are a sole proprietor, you will report the income from the business on your personal return. If you are married, you need to determine if it will save you more to file jointly or separately.
Realize the benefits of saving for retirement. Any money you put in a traditional or Roth IRA — up to $5,500 annually (or $6,500 if you are over the age of 50) — is tax deductible.
Considering paying quarterly. If you dread April because you know you will be socked with a big tax bill, consider setting up quarterly tax payments instead. Your accounting software probably has an option that will allow you to spread your payments over the year.
To learn more about asset protection strategies for your business and how we work with you as a partner in protecting your company, contact us today to schedule your LIFT™ (legal, insurance, financial and tax) Foundation Audit.