5 Tax Planning Tips For Your Small Business

Why wait to get a jump start on next year's taxes? Here's what cleaning contractors can do right now.
5 Tax Planning Tips For Your Small Business

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Small-business owners have survived another tax-filing season — hopefully with their sanity and their business finances intact. Even for small-business owners who have tax filing down to a science, however, there is always room for improvement — and there is no time like now to start thinking about next year’s tax returns.

In fact, prudent tax planning is a year-round endeavor. The more tax-aware you are throughout the year, the smoother things will go for you when it comes time to fill out the actual returns, and the more likely it is that you’ll take full advantage of your potential write-offs and deductions.

Keep track of business deductions

For example, to make sure you take full advantage of those deductions, be vigilant in keeping records and receipts of any and all necessary and reasonable business expenses. Many of these are going to be pretty obvious—equipment, rent, employee salaries—but there are a couple of potential deductions that you may not know you can claim.

Consider trips where you mix business and pleasure; if more than half of the trip is devoted to business, you can write off your travel expenses. Also note that business losses can be deducted against the business owner’s personal income.

Classify your business correctly

Something else to consider: How is your business classified? If you haven’t classified your company properly, you may be paying an inappropriate (read: too-high) tax rate.

Is your company a sole proprietorship? A partnership? Is it an LLC? Hopefully you know the answer and are accepting the appropriate tax burdens—but if not, do some digging and figure out your business’ proper standing today.

Pay in installments

Sometimes small businesses are hit with larger-than-expected tax burdens, which can prove problematic. In fact, a high bill from the IRS can threaten to capsize your plumbing and drain cleaning business, or at the very least do some real damage to your cash flow.

But there is a way around this. If the IRS hits you with a large amount to pay, you can request to pay it in smaller installments rather than all at once. Monthly payment plans are available, and they can be advantageous for small-business owners with narrow margins or already-restrictive cash flows.

Start scheduling

The tax-filing season presents you with a lot of dates to juggle and a lot of milestones to keep track of. Start planning your tax season timeline now by getting important filing dates on the calendar.

There are some great tools available to help you with this, including a handy desktop calendar you can download from the IRS website.

Enlist help

A final note for small-business owners: In case it needs to be said, taxes are serious business, and not something to be approached haphazardly. The penalties and fees for improper tax returns are steep, and potentially ruinous for your business.

For many small-business owners, it is a worthwhile investment to hire an outside accountant — a seasoned professional who can remove the guesswork, ensure that everything is above-board, and ultimately get you the best savings.

It may even be prudent to find your tax professional now, because when it comes to small-business taxes, you can never plan too far in advance.

About the Author

Amanda E. Clark is the president and editor-in-chief of Grammar Chic Inc., a full-service professional writing company. She is a published ghostwriter and editor, and currently under contract with literary agencies in Malibu, California, and Dublin, Ireland.
Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects and often engages in content and social media marketing, drafts resumes, press releases, Web content, marketing materials and ghostwritten creative pieces.

Contact Clark at www.grammarchic.net


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