For those who own small businesses, every dollar is important, especially where taxes are concerned. Whether a business is a corporation or a partnership, the government offers substantial deductions that lower tax liability and allow business owners to put more toward staff and capital.
Business owners can read below or Click here learn how to reduce their overall tax load.
Buy With an Eye Toward Savings
Whether buying technology, software or business furniture, business owners should save their receipts and keep records to prove expenses claimed on tax returns. The limit for new/used asset purchases is $25,000 per year, but businesses must be profitable to receive the benefit on a Business Tax Return in Tulsa.
Give Generously
Corporate donations of property, money and supplies are all tax-deductible, as are bonuses given to officers, partners and employees. S-corporations should closely monitor officer compensation to ensure that IRS guidelines are met.
Business and Personal Assets Sometimes Mix
If a home is used for business purposes, insurance, mortgage interest and repairs may be tax-deductible. Partnerships and corporations can deduct expenses for non-personal usage of personal vehicles, as well as employee reimbursements. Expenses may include parking fees, tolls, fuel and maintenance. Loan interest and vehicle depreciation are also deductible.
Itemized Deductions
Sometimes business owners overlook expenses that are deductible if the amount is more than two percent of AGI (adjusted gross income). Such expenses include tax prep costs, job hunting expenses, business vehicle costs, professional association dues and part of medical expenses if they are more than 7.5% of AGI.
Deduct Entertainment Expenses
Entertainment is any recreational activity for employees, clients or customers. Only 50% of these expenses are deductible, but they can really add up during the year. Expenses must be reasonable and common in the industry, and they must help to bring more revenue. Above all, the deduction shouldn’t be abused.
Business owners have many opportunities to save on a Business Tax Return in Tulsa. It’s highly advisable to do a practice run with a tax preparer or with online software before filing, to identify areas where savings could be increased. By answering questions about revenues and expenses, business owners can see how small changes can decrease tax liability.
