Tax Season: Tips for Small Biz Owners
April 15th isn’t the most anticipated day of the year, but it doesn’t have to be the most hated, either. Small business owners often have a lot to worry about when tax season rolls around, as many businesses watch their profit margins dwindle once the yearly taxes are paid. Fortunately, there are plenty of ways to make the filing process easier and less painful to your bottom line.
Check out these tips for improving your numbers during tax season.
Tip 1: Maximize Deductions
By reducing your business income, you have the opportunity to save yourself quite a bit on your tax responsibility. A tax deduction (often called a write-off) is a business expense that can be subtracted from your total taxable income. Few small business owners understand the extent of allowable deductions, from the premiums of their Dayville business insurance to their bank fees or credit card interest. A key deduction for any business will be the business insurance cost, but don’t be afraid to get detailed with other expenses. A CPA or tax attorney will know what qualifies as a deductible expense.
Tip 2: Defer Expected Payments
Rather than trying to collect from all your clients at the end of the year, consider pushing out the payment deadlines until the end of January. This puts any payments received into the next season. While it will have to be claimed for the following year, a large payment from your biggest client in December could throw a wrench into your tax estimations. Try to schedule or defer specific payments around your tax reporting.
Tip 3: Make Strategic Purchases
The end of the year is the best time to stock up on office supplies, purchase new equipment or make charitable contributions. You can use these purchases as deductions when you file. Though you can make purchases throughout the year, saving them until the end lets you know how much you can afford to spend to receive a decent tax benefit.
Tip 4: Invest in Going Green
The government gives companies making an effort to go green significant tax credits. The largest green solution deduction you can earn is through investing in solar power. However, purchasing water-heaters, printers, computers, or green appliances could all count toward energy-efficiency credits.
Tip 5: Write Off Item Returns
For any item that is returned where a refund was issued, it can count as a loss against your yearly income. You will need to track the returns and refunds carefully throughout the year and organize the invoices in one location. Accounting software is an efficient way to keep track of your returns.
Plan for Future Tax Seasons
These are just a few of the tips you can use to make tax season less frustrating for your businesses. Working with a CPA or tax specialist can give you more insight on how to prepare for future tax seasons, as well.
About Byrnes Agency
At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.
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Dayville Office
Phone: (860) 774-8549
394 Lake Rd
Dayville, CT 06241
United States
info@byrnesagency.com
Hours of Operation: Monday- Friday 9:00am-5:00pm
Norwich Office
Phone: (860) 886-5498
6 Consumers Avenue
Norwich, CT 06360
United States
info@byrnesagency.com
Hours of Operation: Monday- Friday 9:00am-5:00pm