Tax Season Tips for Small Businesses
From taking out a small business loan to leasing equipment, running a small business requires time and money. With the arrival of April signaling that tax season is drawing near, small business owners may want to learn how they can benefit from tax breaks. The interest accrued from small business loans and the money spent on leasing equipment for the business can all be deducted from taxes, thus saving an organization money.
As tax season is here again, many recently released news articles took the time to explain ways in which small business owners can save money on their taxes this year.
Save money with proper documentation
According to USA Today, small businesses can save money on taxes by writing off expenses from services that helped them file their returns – such as legal and consultant fees. However, to reap these types of benefits, businesses need to track all itemized deductions, including any possible assets, for the most optimal tax return.
Small businesses can receive tax breaks on interest accrued from loans and credit. As many small businesses have limited resources or an unstable cash flow, credit card use is often prevalent. A small business should keep records of what the loan money or credit was used for and how they are business-related.
According to Washington Post contributor Brian Sutter, small businesses that employ independent contractors must have updated W-9 tax ID forms. Make sure to verify the names and addresses of contractors employed throughout the year. Keep a file of how much each contractor was paid. Using an e-form vendor to store information may help next year’s tax filing run more smoothly.
Marketing and networking expenses can count
Marketing efforts may also be deducted when filing, as any efforts made to build the brand with customers and the community can count, Sutter states. As making connections with others is a main component to building rapport and business, as well as spreading awareness of the business, networking expenses can often be deducted as well.
Business supplies can be deducted
Equipment used by the company, including computers, office supplies, construction equipment, and delivery trucks, may result in a large return.
As many small businesses need help ensuring they are benefiting from the tax deductions available to them, National Funding can provide owners with the capital they need to afford the right resources.