Are you a small business owner in the Glendale area or beyond? With tax season drawing near, we recognize that this time of year is often a stressful time for small business owners. That’s why Robert Hall & Associates makes it our mission to provide our clients with top-notch tax solutions for a worry-free tax season.
We’ve learned a lot after filing taxes for small business owners in a variety of industries since 1971. Whether you’re a start-up company or experienced small business owner, with the new changes to tax laws and regulations, there are always new tax strategies to learn. We’ve compiled our top 5 pieces of tax advice for small business owners to get you started:
1.Separate Your Business & Personal Expenses Ahead of Time
Save yourself the hassle of combing through your personal accounts at the end of the year and trying to piece out business expenses from personal expenses. Instead, always establish a separate bank account and credit card for your business. By only running business expenses through those accounts, you ensure that you won’t miss reporting any business expenses due to commingling your money. Use a car prominently in your business? You may consider having your business purchase a vehicle, that way you can write off the entire cost and don’t need to track separate business usage for gas mileage, maintenance, parking, etc.
2. Choose the Right Entity for Your Personal Situation
Did you know that choosing the wrong entity for your business could result in you overpaying in taxes? It may be time to reconsider if your current entity is right for your business. Sole proprietorships, partnerships, corporations, and limited liability companies have different legal liability, estate planning, and taxation consequences. For small business owners, it’s important to evaluate all opportunities if you’re looking to minimize taxation. Consult with your accountant to determine how your business should be best classified.
3. Take Advantage of Tax Planning
Smart small business owners work with their accountant throughout the year, not just when taxes are due. Sitting down with your tax advisor to discuss your business’s current finances and future goals can help them get a full picture of where your business is headed so they can help you plan ahead for certain tax strategies and deductions. For example, have a good year in business? You may want to make significant moves to your personal finances, such as mapping out extra tax write-offs or deferring more money into a retirement account to keep yourself in a lower income tax bracket. Your tax advisor can offer more money-saving advice like this!
4. Use an App to Keep Track of Business Auto Usage
Do you use your personal automobile for business use? In order to deduct the cost of using your vehicle, you need to track your mileage, as well as itemized receipts for gas, maintenance, tolls, and parking fees. Apps like TripLog and MileIQ make tracking business travel simple right in the palm of your hand. Never miss deducting another vehicle expense again when it’s this easy.
5. Always Consult with a Tax Professional
Think a tax software program can do the work of a tax professional? Think again. The truth is, each business is unique and can’t be serviced by a traditional cookie-cutter tax preparation. There’s no substitute to sitting down with a tax professional like the Enrolled Agents at Robert Hall & Associates, who will personally go through your year end financials, preparing your tax returns, offering insights into law changes that might affect you, and discussing how your future plans might affect your taxes.
***Looking for more 2018 tax advice? Contact the tax professionals at Robert Hall & Associates! Call us today at (818) 242-4888 or fill out a contact form to speak with an Enrolled Agent to discuss your small business’s taxes today!
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