Tax day may have passed already, but for millions of American business owners tax season is still alive and well. If you’ve submitted an extension request you’ve got until the middle of October to finalize your tax returns for 2012. That means there’s still time to save money if you buckle down and get to work. If you filed your small business taxes and either owed money or just weren’t thrilled with the paltry return you received, now is the time to make changes that will help you during next year’s filing. Just because you’ve handled things one way all these years doesn’t mean there isn’t room for change. This is especially true for the small business owner, as there are tons of ways to save if you know what you’re doing. Here are just five of the ways you can reduce your small business taxes.
Every small business works to reduce expenses, but it’s impossible to run a company without having to pay money. Are you keeping receipts for all of these expenditures? If you really want to reduce your small business taxes, you’ve got to start getting obsessive about keeping all of your receipts. Writing off expenses can save you thousands on your tax bill, but you’ve got to have the receipts to back up your claim. There are even mobile apps that allow you to digitize receipts, removing the need to hang on to those mounds of paper. Keep every single receipt, whether you’re sure you can claim it or not. Then when the time comes, you’ll be in the best possible position.
Health insurance is a huge expense in most people’s monthly budgets. And if you’re a small business owner, chances are you’re footing the bill for this coverage. But did you know that as a self-employed professional you can deduct your health insurance costs? If your spouse and dependent children are covered under this policy, you can even deduct their costs from your business taxes. Make sure you qualify, and cash in on this lucrative deduction if at all possible.
Chances are you use your vehicle at least some of the time for business endeavors. Most people know about claiming these expenses, but they just take the standard mileage deduction. That could be quite a bit of change on its own, but if you’re willing to put in the work you could be saving much more. This year, make sure you handle your automotive expenses through itemized deductions. You’ll have to save all receipts and keep a mileage log, but it will allow you to claim all sorts of additional expenses, including vehicle depreciation. That’s a lot of money you could be getting back from the government.
Now is also a fantastic time to consider working from home. If you run your business out of the office you’ll have all sorts of additional expenses to deduct, but the majority of small businesses in this country are run out of a spare bedroom or a basement office. Are you claiming those expenses? As long as this is your primary place of business, you’ll be able to claim a portion of your rent or mortgage payments, your utility bills and even the security system on your home as an expense of running your business. Maintain good records and only claim the actual percentage, and you’ll be in good shape.
Finally, consider hiring a professional to prepare your taxes for you. It’s easy enough to download all of the IRS forms you need yourself, and most people handle electronic filing on their own. But you won’t know all of the tricks and shortcuts that a professional tax accountant will have at their disposal. It will cost you a bit of money, but chances are they’ll deliver you a significantly larger return, making the whole process worth it. And best of all, they’ll catch mistakes before they are made, hopefully saving you from the scary possibility of an IRS audit.