Although you have two extra days this year to file your taxes, April 17 is just around the corner. Read up on these tips to maximize deductions and keep more money in your pocket in 2012.
Take Good Advice
A good tax advisor can take the pressure off when it comes to knowing which deductions you qualify for and what’s new each year in the world of small business taxes.
- Look for someone who has experience with your type of business. Ask your business contacts or friends for references.
- Find a thorough advisor who will ask lots of questions in order to determine which deductions you may qualify for.
- Choose someone who will be able to accompany you in the event of an audit.
- If your taxes are fairly straightforward, you might consider tax preparation software. Not all programs are created equal, so before you begin, make sure your software supports common business forms such as Schedule C. Try Turbo Tax, H&R Block, or TaxAct for small business filing.
Set Up A Home Office
- If it meets the right criteria, your home office could allow you to deduct a percentage of expenses such as rent or mortgage payment, property taxes, insurance, utilities, water, garbage, and more.
Track Business Expenses
Keeping good records throughout the year will save you time and energy when tax time rolls around.
- Save receipts for all business-related purchases. Create a special file for this purpose and make it a habit to tuck those receipts away at the end of each day.
- Find an accounting program or software you like and can commit to using, to help you keep track of business expenses and tax deductions.
- Taking a client out for lunch? Attending a business training or networking event? Deduct a percentage of business-related meals, travel expenses, and various forms of entertainment.
Record Your Mileage
- Option 1: Keep track of and deduct all business-related expenses (gas, mileage, tolls, parking, etc.).
- Option 2: Deduct the standard mileage rate ($0.51 per mile in 2011) for each business mile driven, plus all business-related tolls and parking fees.
Deduct Your Health Insurance
- If neither you nor your spouse has a full-time job that provides health insurance for your family, then you may qualify to deduct your health insurance costs.
