You did it! Your taxes are finally in the books for another year. And then it happens. You get a statement from your (apparently forgotten) investment account. Or you hear from a neighbor that your son’s Lasik eye surgery may be tax-deductible as a medical expense. Now what!? Don’t panic or worry an IRS agent will show up to imprison your first-born child. We have assembled step-by-step instructions for you to follow.
Tax season is upon us. That nervous sense of dread is pitting in your stomach; Lady Liberty is waving signs that say “Tax Special” on street corners; Turbo Tax is stocked, it seems, in every store. And if you are like most business owners, you are scrambling for any missed tax deductions. There is one very helpful deduction that we at Sweeten CPA are always sure our clients who can take it do take it! It’s the home office deduction. (Another deduction we always recommend our clients to take when possible is the business mileage deduction. Read more about that by clicking here.)
So let’s get right to it.
You know tax season is fast approaching when you constantly see and hear ads in which CPAs promise to save you lots of money! We at Sweeten CPA love you, our clients, (even if you aren’t our client, we’ll share the love!) and want to put in our 2 cents on how to maximize your 2011 deductions before the year ends. You’re welcome, and get to it!
If you itemize your deductions–meaning you count up various allowable deductions that will add up to more than the standard deduction (click here for 2011 standard deduction rates)–these suggestions will be possibilities for you.
Well, have no fear, we are here to clarify the mess of numbers and letters that make up common tax form names! You too can appear confident and knowledgeable when told to gather documents for your Schedule A. “Why of course! I will get all my documents together for my itemized deductions right away.”
It finally happened! You worked your fanny off and your business is growing. Congratulations! In fact, it is growing so much you need to hire help. You are a service professional who could greatly benefit from an administrative assistant. You are a photographer and need the help of hair and make-up artists. You offer delivery service and could use another driver.
In today’s complex world, striking an employment agreement with someone is not the final step; not even close! Among other things, you must determine whether your helper is going to be an independent contractor or an employee. Why is this important? The IRS and the ever-powerful dollar say so! Make the right choice (and stay out of trouble!) by reading on.
Insurance salespeople, architects, realtors, contractors, and property managers; these are just a few of our clients that use their personal car to get from business point A to business point B. As a business owner, if you use your personal car to drive anywhere needed to conduct business (to a meeting, client site, post office, office supply store, etc.) these miles are deductible to you as an expense.
So let’s cut to the chase. The whole process is made more complex by the fact that there are two ways to account for your car expense. Which one is better? Each situation is individual (of course!) so you will need to weigh each option. Or get a CPA to help you weigh each option. (Us?)
One of our clients, Donna, from Development and Training Resources, LLC, gave us a great topic to write about. Remember when we said we would answer your questions? She asked:
“What are the best ways to retain income for future business development required for the following year operating needs without substantial taxes?”