Starting Your Own Business?

Here are a few quick tips to help you reduce taxes

Open a separate business checking account. Many small business owners don't realize the complications that can arise from using their personal checking account to pay for business expenses. If business expenses are mixed in with personal expenses, the IRS may disallow them.

When you set up a business checking account at the bank, be prepared to submit either your social security number (SSN) or an employer identification number (EIN). Your SSN will do if you plan on establishing a sole proprietorship and do not have employees or a retirement plan. If you plan on operating a partnership or corporation, you'll need to submit an EIN.

Keep track of expenses you incur before you start your business. Expenses incurred once you decide to start a business, but before business operations actually begin, are deductible up to $5,000 in the first year of business. The rest is deductible over 180-month period after your business opens its doors.

Tax Tips Small Business

  • Turning Interest Payments Into Tax Deductions

    Make interest payments work for you, not against you

    You can deduct business-related interest on your business return if you used the borrowed funds to purchase business supplies, equipment, services, etc. Co-mingling business and personal expenses makes it difficult to determine what amount of the interest is business versus personal. If this happens, the IRS may consider the entire amount as nondeductible personal interest and disallow the deduction. Therefore, keep all business purchases made with loans and credit cards clearly separate from your personal expenses. Use a separate credit card for your business to make it easier.

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Small Business Quick Tip

  • DOT Hours of Service

    Truck drivers and other employees who are subject to the Department of Transportation's "hours of service" rules are allowed to deduct 80 percent of their meals in 2016. In lieu of using actual expenses for meals and incidental expenses, you can deduct the federal rate of $63 per day.
Friday, 22nd February 2019
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Tax Tips Personal

  • Giving to Charity

    New rules require diligent recordkeeping
    Keeping the receipts from your charitable contributions just became more of a priority. Starting January 2007, you will not be allowed to deduct charitable contributions of any amount unless you have the proof. What does this mean for you? Starting in 2007,

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Personal Quick Tip

  • Summer Day Camp

     

    Along with the lazy, hazy days of summer come some extra expenses, including summer day camp. But, the IRS has some good news for parents: those added expenses may help you qualify for a tax credit.

    Many parents who work or are looking for work must arrange for care of their children under 13 years of age during the school vacation. The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the rest of the year.