The tax season is a time of wonder. Do we have all the information we need to give our accountant or something as simple as having all our receipts? We wonder if we can do our taxes ourselves. We wonder if there are write-offs that we aren’t aware of. We wonder, which brings questions. Lots of questions.
Here are the top 5 questions we hear from business owners concerning taxes:
You want to make sure you keep your business and personal accounts separate to lower the risk of being audited on your taxes. Hiring a bookkeeper can grant you the most significant tax benefits with low tax audit risk. The IRS advises business owners that any expense that is standard and required for running their business is deductible. These deductions can come in entirety, such as office expenses, advertising, business insurance, and loan interest payments, or they can be shared between personal and business. Some examples of these are the home office, purchasing a computer you use at home and work, or a cell phone.
2. Can I deduct my home office?
The short answer, it depends. The IRS has rules and guidelines when it comes to this deduction. The basic idea of these rules is if you use a specific portion inside of your home exclusively and regularly to conduct business or to store documents for your business it can be a write-off.
3. What are the most significant tax mistakes business owners make?
The biggest mistake we see business owners make is not prioritizing their expenses and receipts throughout the year for their business. This is normal and honestly can be handled with the care it needs by implementing us as your bookkeeper. When the organization is added to this aspect of your business throughout the year, you, as the business owner, are gifted the time needed to focus on the immediate demands of the company.
4. Are tax deadlines different for businesses?
Deadlines are situational when it comes to business taxes. So, before you start thinking April is your deadline, ask yourself what forms you are filing. For example, if you are filing a partnership Form 1065, your form must be filed by March 15.
5. How do I know if I need to pay self-employment tax?
Self-employment tax consists of Social Security and Medicare taxes specifically for individuals who work for themselves. This rate is based on a percentage and should be filed using Form 1040 or 1040-SR. The self-employment tax rate is 15.3%. According to the IRS, anyone whose net earnings from self-employment were $400 or more must pay self-employment tax.
Are you interested in learning more about ShoreSource Business Solutions, LLC?
Feel free to reach us at 843.729.2961 or firstname.lastname@example.org.