Let’s face it: business tax returns can be tricky. Whether you file a corporate return or you report pass-through business income on your personal return, you need to stay on top of a host of federal, state and local tax deadlines and statutes, all of which can change from year to year. With a little attention, though, you can lessen that burden and gain the full benefit of applicable tax laws. Here are three ways you can maximize your return:
File On Time
This should be a no-brainer. But sometimes you just get overwhelmed and miss your tax filing deadline, or you know you’re not going to make it, so you file for an extension. When that happens, you may be subject to hefty penalties and interest, not to mention all the extra work of calculating those. If possible, you should always try to file on time. For federal returns, the IRS maintains an online calendar that can be imported into your own calendar program. The IRS can also set you up with automatic filing reminders sent to your email inbox.
Take All the Allowable Deductions
Make sure you claim all the deductions allowable to you. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that’s common and accepted in your trade or business. If you’re not certain whether something is deductible, it’s worth doing the research to find out.
For a more in-depth look at commonly deductible and nondeductible expenses, as well as other tax information, check out 1-800Accountant’s Tax Savings Calculator. This handy tool breaks out your potential tax savings by industry and discusses some of the finer points of your business taxes.
Hire an Accountant
You could do it all yourself and then wonder whether you’re getting it right. Or you could hire an accountant to maximize your return. A knowledgeable accountant can help keep your return on schedule and make sure you’re getting all the deductions you deserve. Your accountant can also become a trusted advisor for other business decisions you make, giving you a better chance to meet your business goals and find success.