Avoid the Tax Season Pitfalls for Your Small Business

Tax seasonPeople tend to dislike this time of year. This is even more true for small businesses. You don’t need to live under the ever-present tax thundercloud. Your business should be prepared for this season. These are five simple rules that will help you keep your business on top of tax season.

1. Maintain accurate accounting records. Tax season is much easier when you are aware of the financial details of your company throughout the year. Also, if all records and information are correct and up to date, your accountant can spend more time on ways to save the company money, rather than organizing information.

2. Triple check your tax bracket. Marginal rate analyses are a way to ensure that your small company is not forced into a higher tax bracket. This is especially important for businesses that are on the brink. When your income bracket is lower, recognize it; and pay deductible expenses if the bracket is greater.

3. You should take inventory of equipment, supplies, and any other items that could be written off. Equipment may be too old or damaged to allow for productivity. The company can deduct additional expenses for replacing office supplies or removing obsolete assets prior to the start of the new year. To determine if a write-off is more advantageous for costly technology, consult your accountant. On Call Accountants, financial planners, maximize deductions and increase expenses in order to avoid paying exorbitant fees. Find out more about deductions. www.oncallaccountants.com.

4. Contribute towards a retirement plan. You can reduce your year-end income by setting up a retirement account if you haven’t yet. Qualified retirement plans allow for tax deductions on all contributions. Consider the contribution limits, and then choose the best plan for your company. Employee loyalty will be enhanced by a retirement savings plan.

5. You should look into tax credits for business. Numerous tax credits may be available for small businesses. The IRS website lists them all. Credit for Increasing Research Activities, Low-Income Housing and Disabled Access Credit are some examples of credits.