Tips For Tax Planning As A First Time Business Owner

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Tips For Tax Planning As A First Time Business
Owner
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• We all know that the overall goal of planning our
  taxes, is to pay the minimum amount that we are
  legally required to, but if youre a business
  owner, be warned that any actions you take to
  reduce your taxes, will have effect upon the book
  value of your assets. Its important that you
  think long and hard about what might be best for
  your business in the long term, instead of simply
  focusing upon reducing your taxes each year.
• If youre a first-time business owner struggling
  to plan your taxes, here are a few words of
  advice

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• Always distinguish between your business and
  personal expenses
• The importance of keeping your business and
  personal expenses separate, cannot be stressed
  enough. Blurring the lines between the two can
  set of warning signals to the IRS. They need to
  see that your business is in fact, a business,
  and when your personal expenses are mixed in with
  your business expenses, it may appear to the IRS
  that you are conducting a hobby instead. This
  would go on to prevent you from being allowed to
  deduct your business expenses from your income.

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• To make sure this doesnt happen, simply maintain
  separate bank accounts and credit cards and keep
  your records up to date.
• Maintain your records
• Being able to justify your deductions can only
  happen if you maintain good and thorough
  documentation, and listed below are some of the
  common deductions available to small business
  owners
• Travel automobile mileage must be supported
  with trip logs

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• Entertainment diarise all entertainment
  expenses including such details as date, place,
  amount and the names and business relationships
  of those entertained
• Meals can only include those eaten while away
  from home and conducting business
• Office at home the deduction available will be
  dependant upon the allowable square footage as
  per the IRSs requirements
• Health Insurance premiums paid for employees
  are deductible
• Charitable Donations if you have contributed
  assets to charity like equipment or software,
  then your deductions will be limited to the value
  of the asset on your books

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• Review your accounts receivable and inventory
  balances
• Be sure to review your accounts receivable for
  collectability, before you close your year end
  books accounts that are likely to be
  uncollectible need to be written off as it will
  minimize your revenue and your tax liability.
  Obsolete or unusable inventory should be written
  down to scrap value to help lower revenues and
  your final tax bill.
• Could you be owed tax credits?
• There are several tax credits that you may be
  eligible for, such as research and development
  credit, energy tax credit, disabled access
  credit work, work

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• opportunity tax credit and healthcare tax
  credits.
• Be prepared
• When you file your taxes for the first time as a
  business owner, you may make mistakes and will be
  able to note areas in which you lacked
  documentation or found a way in which to lower
  your taxes for the next year. Remember all of
  these and implement the necessary changes well in
  time for the next years tax season.
• Whether youre a seasoned tax planner or a
  first-timer with a business, accurate records and
  timeliness are essential, and if you struggle
  with this as many

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• business owners do, its best to use the services
  of a tax consultant to be sure to stay on the
  right side of the IRS and get all the tax breaks
  that are available to you.
• At Heyer Associates, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax service Coral Gables.
  If you are looking for individual tax preparation
  in Miami, Heyer Associates would be a right
  option.