Tax deductions can be quite valuable, because they reduce taxable income for the year. For example, a self-employed individual or independent contractor in the 25% tax bracket can save $25 in income tax for every $100 in deductions, while also saving as much as $15 in self-employment taxes for every $100 deduction from taxable income.
At first glance, it might seem that the government shutdown will affect only those small businesses that sell products or services to the federal government or one of its agencies. According to Gary Milkwick, CPA and Vice President at 1800Accountant, there are three surprising ways the government shutdown is likely to affect small businesses.
“Making payroll”—that is, managing a small business so that paychecks are delivered on time even when the unexpected occurs—can be one of the hardest parts of a small business owner’s job. One thing certain to make that job even harder is a payroll tax mistake that can lead to IRS problems.
If you use your home for business, there are expenses you can deduct on your tax return. The home office deduction is available to both home owners & renters alike. The home must be used by a self-employed individual or an employee who works from home for his employer’s convenience.
CPA’s provide a valuable service. However, you can’t expect them to read your mind, tell you what is wrong with your business, or give you opinions about your business. Some are great business consultants along with their tax knowledge.
R is for recapture. Recapture is a term that comes into play in a variety of circumstances, but it means the taxpayer is picking up income or tax, which is always a bad thing. Recapture is most commonly applied to depreciation.
Small businesses are more likely to get selected for an IRS audit, because many of them are unfamiliar with business tax rules and often conduct transactions in cash, which leaves more room for errors.
If you thought your business trips can be expensive, you need to think again. If you plan and strategize, the government can subsidize your trip so that your trip expenses are minimal. The idea is to combine your business travel with vacation time and document the time spent on business.
Your odds of facing an indirect tax audit are actually higher than the odds of IRS small business tax audits. That’s because while the IRS audits 2–12% of the tax returns filed with the agency every year, some states audit up to 20% of the business sales tax reports filed each year.
This weekend, more than a few small business owners will be scrambling to pull together the documents and information they need to meet the IRS deadline that’s coming up in just six days. Yes, there’s a tax deadline for quarterly taxes due to most states and the IRS on August 15.
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