7 tax-saving tips for small and home-based businesses
March 13, 2014 2:19 PM
1. Register your business
If you decided to start a business from your home as 69% of all start-ups do, according to the Global Entrepreneur Monitor Report then become official. Bonelli says that registering your business with the county, state and federal governments under the proper entity for your business goals is an important step in saving on taxes.
2. Make your company audit-proof
This means more than just saving receipts, Bonelli says. You should keep calendars, mileage and personal-use logs, for starters. Talk to a tax professional about even more compliance-ready tactics that fit your particular business model.
3. Make sure your accountant is a specialist
If you go to a tax professional who specializes in home-based businesses, you could save thousands of dollars in deductions and time, because they already know the most pertinent IRS regulations. Software is only as good as the person using it, says Bonelli, so beware of the do-it-yourself option.
4. Get a second opinion
If the IRS is going to make sure they dont miss a dime, then you should make sure you dont miss a deduction, Bonelli says. Many accountants will offer complimentary consultations on your past year tax returns so you can be sure nothing was overlooked.
5. Tax planning is a year-round venture
If youre running a business, the tax implications of your business decisions are a 365-day consideration, Bonelli says, adding thats why a tax professional on-call is handy.
6. Start a retirement plan
The government makes it advantageous for home-based business owners to save for retirement, Bonelli says, so dont miss the opportunity.
7. Have integrity
Tax fines and penalties for not running your home-based small business properly are stiff, says Bonelli. Get the right information and do things right from the beginning so you dont waste money in the future.
