‘Tis the season to be filing again! As April 15th gets closer and closer, you can almost hear the calculator crunching coming from every home and business as working teens, parents, and business owners alike try to figure out their federal and state taxes and work ‘round the clock on getting the biggest possible refund back in their pocket.
If you are a small business owner, there are additional items you’ll need to remember and be able to check off when tax season rolls around.
Keep track of your vendor expenses.
As a small business owner, working with vendors and outside contractors is just a part of the job. Joint ventures like these are a great way to create mutual, lasting partnerships with other businesses. As you work with these vendors and outside contractors, be sure to anticipate which ones you will pay more than $600 to over the course of the year so you can send your 1099-MISC forms.
Try an alternative to raises.
Offering fringe benefits such as health, vision, and childcare assistance instead of the usual yearly raise can help reduce tax burdens. Of course this is something you should weigh over with your team and keep open for discussion, but should everyone be in agreeance, this alternative could save your business a lot of money when you start the filing process.
What to do with auto expenses…
If frequent driving is a key part of what your small business does (i.e. owning a catering company that relies on using a vehicle to make deliveries), take a moment to consider how to deal with driving expenses when doing your taxes. When faced with a choice of deducting either your actual auto expenses or the mileage deduction for business-related driving, take the mileage deduction. It’s a better deal with gas prices as high as they are right now and you can even download a mobile app to easily calculate your mileage as you go.
Don’t forget about your cell phone!
The Small Business Jobs Act of 2010 removed cell phones from the definition of listed property and the requirements that apply to listed property no longer apply to cell phones. That means you no longer have to document each business purpose for each call, and you can deduct your cell phone as long as more than half of your time on the phone is business related.
It’s amazing how something so simple can sneak up on so many entrepreneurs. Prep all year long for tax day by keeping your numbers, paperwork, and receipts in order so that you’re not scrambling at the last minute. Then when the time comes you’ll be good to go and you can just enjoy the best part of tax season: getting some of your hard earned money back!
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.