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Ways to better prepare for the upcoming Tax Season

12/19/2019

6 Comments

 
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Better Business Planning: Ways to prepare for the tax season ahead
 

Tax season is almost coming to a close and final preparations are being completed as this year comes to an end. With the 2019 year ending, many businesses are considering ways to improve upon the upcoming tax season ahead. With tax laws changing constantly it is a good idea to start the next year off on the best footing. Here we have compiled a few tips to help you and your business better prepare for tax season next year.
 
Organize receipts (use accounting software)
 
One of the most missed opportunities when it comes to reducing taxes owed is keeping track of receipts. Those dinners where you takes business, that receipt for an oil change on a company car, and that repair on a business computer adds up. If you do not organize and keep track throughout the year, you could be missing out on major deductions. By implementing software such as QuickBooks you could easily manage those receipts and organize them for the year. If you are relying on other systems, make sure to organize a simple way to keep track of expenses.
 
Go paperless
 
While the idea of not keeping receipts in a folder or in your wallet/handbag scares you, there are some pretty cool advantages of using a paperless system to track all your business handlings. With so many software solutions on the market, you can easily streamline, organize, and track business transactions in one electronic platform. Going paperless let’s you save by file name, dates, and can even keep you organized on things like payments received, bills paid, and deductions at filing time. Going paperless also saves trees- and we want to keep trees around.
 
Download credit card summaries and bank reports
 
Summaries are a great way to reconcile and ensure you accounted for spending and payments received. With downloading summaries, you can review where most of the spending has gone (categorical) and where you could see to save on some coasts and also find solutions to maximize the detections that may be attached. Knowing where money comes and goes before heading into tax season keeps you more in line with, well, your bottom line.
 
Ensure deductions are in order
 
It can’t be said enough: deductions, deductions, deductions. When it comes to small business making sure you’re deductions are in order is key. Heading into tax season, compare deductions from years prior to present all while reviewing any tax law changes. It’s best to see where trends are going for possible write offs along with where more deductions will come from in the future.
 
Keep information as you go
 
One of the biggest missteps of every small business is waiting until the end of the year to get tax documents organized. This has accounted for thousands of dollars left on the table at tax time. If you implement a online or electronic system for tracking expenses and revenue throughout the year, you increase the chances of reporting every penny. Keeping track throughout the year takes some discipline but it pays off huge in the end.
 
Consult with your tax advisor/accountant
 
Consulting with your tax advisor or accountant throughout the year is a wise move. Using an expert as your business grows to help you to ensure the most well laid out plan for the year. Use the trust and support of a seasoned professional to ask questions as the landscape of your business changes and as tax laws become more clear. It’s a good move to implement sooner than later.
 
 
Staying ahead of taxes is a key to a successful upcoming tax season. Preparing and setting some good foundational practices will ensure you have the best game plan going into this upcoming year.
 
With these tips you can be well on your way to a great year. However if you find that you need help using a trusted tax professional and accountant, we can help. With PKJ Consulting we offer a variety of services for your business. To learn more about what we offer and how your business can benefit, connect with us HERE and we can get started right away.
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The 10 Purchases You Didn't Know Were Tax Deductible

12/2/2019

2 Comments

 
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​Claim your deductions! The 10 Purchases You Didn't Know Were Tax Deductible.
 
Tax time for many small business owners can be a stressor or a benefit to the overall bottom line. When it comes to filing taxes and looking for ways to reduce the tax liability, finding deductions in the day to day operations is vital. Most business owners know the common deductions such as office supplies, advertising and phone use- to name a few. There are however some deductions you may not know about! In this post we will cover the 10 deductions you didn’t know were tax deductible (in no particular order).

  1. Local transportation
Many businesses are aware that they can write off car expenses for their vehicles used for business purposes. Oil changes and maintenance are deductible so long as it's on a vehicle used for business. One key deduction many miss though is using local transportation or claiming the mileage on the car. If you take a bus for business reasons, you can deduct those bus fare fees and costs. If you drive your car you can claim the miles driven for business purposes as a deduction.

  1. Travel away from home
Many businesses rely on travel away from home to make the business flow properly. Costs for business related travel such as airfare, hotels, meals, and taxi/Uber trips are all pretty common deductions you can write off. Some often missed deductions are the little things that are purchased while away. Purchases such as internet fees at the hotel, meals while traveling, even fees paid on travel related costs such as hotel parking, can all be deductions so long as they were absolutely part of the business travel.

  1. Commissions paid to subcontractors
Do you pay subcontractors? The commissions you pay to anyone who you deem a subcontractor can be deductible. It’s important you file a 1099-MISC and 1096 as necessary, but these fees and payments are for sure great deductions you can make at tax time.

  1. Depreciation
The word depreciation may sound like an insult to your business but it’s not. In fact, all businesses have depreciation and you can deduct that! Depreciation such as business cost, business use of assets, and sales price for any assets sold could be deducted. Talking with a tax pro can help better explain how and what this could be for your specific business.

  1. Business insurance
Many businesses have (or should have) insurance for protection in case of the worst. Insurance is not cheap and many businesses don’t think about deducting that as an expense. You can deduct insurance whether it’s ongoing insurance coverage or even insurance coverage that you purchase for specific events or functions you participate in throughout the year.

  1. Interest expense
Many businesses pay interest on various s elements of operations. If your business runs out of your home or a building that your business owns, you can deduct the interest paid on that property. If you took out a business loan or have an investment expense (that you pay interest on) you can deduct that at tax time. Be clear to separate out any personal interest from business as you can’t combine them.

  1. Rent expense
If your business rents something-anything- it can be written off so long as it’s needed for the business operations. If you rent out a business space, rent equipment that is a must have, or rent something to conduct operations, it can be deducted. Rent is not just for property. Rent can be for a truck to drive parts around town or it can be rent of an event space for a conference. Rent adds up so why not write it off?

  1. Repairs
Does your business have equipment, buildings, cars that have or need repairs? The cost associated with these types of services can be deductible. If the repair work is being conducted on supplies or materials that are used for the business, you can deduct them.

  1. Health insurance
The cost of health insurance for small businesses can be rather high. So when it comes to deductions, don’t leave off the payments you make for health insurance. Each plan and business will have different deductions but it’s important to consult with a tax professional to see what can and will be deducted.

  1. Internet/computer use
It may seem like an obvious one, but internet and computer use can be deducted. Yes your home internet may be split between personal and professional, but you can identify how much usage if for the business and deduct that. In addition to that, internet set up fees, equipment rentals, and computer upgrades for business use can also be deducted.
 
There you have it- the top 10 purchases you make that may be deductions at tax time. While this list doesn’t cover them all, this is a good reminder to always consult with a tax professional like PKJ Consulting to ensure you are getting your maximum deductions. If you’d like to learn more or connect with our team feel free to reach out to us HERE and we will be happy to assist!
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