Tax Prep For Your Business

Business Income Tax is a crucial issue for every businessman. The expenses and credits earned in each tax year that a business files its income tax returns will determine the amount of taxes to be paid.


 1. Business Tax Preparation Tips   

In addition to income taxes, there are several other taxes payable by corporations, the self-employed individuals and small businesses. These include: Employment insurance premiums, which are not included in gross receipts tax; Disability and Employment Insurance premiums; Federal Income Tax; Import duties, Excise duties, and GST; and sales tax. While all of these taxes may seem small in comparison with the income tax, they do add up, and it is always important to do your own research on the taxation needs of your situation.

In addition to business taxes, there are also personal taxes such as income taxes, death taxes, and income-based taxes such as the Goods and Services Tax. The federal government, province governments, and many municipalities also levy additional taxes on individuals and businesses depending on their ability to collect and remit. Some examples include: HST, PST, and provincial/municipal taxes. Some jurisdictions also have an individual and business filing and recovery tax which are considered to be a hidden tax.

Making your business green has many benefits from the environment, better work morale, lower NYSEG bill but there are also many tax benefits of a green business.

The most crucial tip for you to remember when it comes to taxes it to keep meticulous records.  If you have receipts and documentation for all of your income and expenses, either an auditor from the government, or a professional of your choosing can always determine the correct application of tax liabilities and credits.

The types of deductions and credits available are determined by filing your income tax return and this includes credits for purchases, disbursements, and expenses. Some people mistakenly think that the more deductions they take the better their financial situation will be, but this is not true. Instead, the best way to determine which deductions you qualify for is to read the complete Canada Revenue Agency handout called the Explanation of Tax Credit and deductions. To receive the most possible benefits from tax deductions and credits, it is always a good idea to consult an expert, such as a professional CPA.

 2. Top Small-Business Tax Mistakes 

There are few things that can be more financially devastating to a small business owner than the surprise of a business tax penalty when the IRS demands payment. It is a known fact that most people make mistakes while preparing and filing their annual income tax returns, and even more so in the area of calculating their taxes by using an accountant or CPA. One of the most common mistakes is not double-tilling their paychecks so that they end up showing a negative income on their tax return. The double-tilling of paychecks will cause an auditor to seize all money in your bank account that is due as taxation and will then be sent to the government for you. You might be innocent, but that is no defense against the penalties that await you.

One of the most common mistakes that a small business owner can make when preparing his or her yearly financial reports to the IRS is underestimating the amount of business expenses. The most common mistake is in not including a rental car expense on the income report, which could easily increase the tax liability by thousands of dollars. When you hire a certified public accountant, you can be sure that these and other common business tax mistakes can be caught and avoided. In many instances, it is the experienced expertise of the CPA that is able to help a business owner avoid the pitfalls of errors made by an ordinary employee.

The financial planner is trained to look for and correct errors made in a person’s tax forms, which includes CPA forms. The financial planner is also well-versed in the various tax rules and regulations that apply to you, so that he or she can advise you on whether or not you should file for an extension on the deadline. Because the financial planner is well-versed in all the laws and codes that apply to you, he or she can inform you in advance of any impending deadlines for filing your taxes that may cause a delay in receiving your tax refunds. A certified public accountant can be your best ally in staying out of hot water with the IRS, so that you can receive the maximum amount of money back from your tax refunds.


 3. Tax Tips For Your Business 

Business Tax Tips and tricks can save your company a lot of money, time, and headaches. Knowing what is going on in your tax season can be very helpful. There are many tax benefits for individuals that own and operate small businesses. It is important that you understand the different deductions that are available to you so that you can save as much money as possible.

The most common tax liability for many businesses is the Home office business deduction. This can reduce or completely eliminate your business taxes if you use a part of your home for your business. There are also many other tax deductions that can be claimed by any individual or small business. These are often not discussed as much, because they are more of a common sense type of thing, but when you are starting out you should become familiar with them and begin to build your business around them.

The business tax tips and tricks tip is to use an accountant that is familiar with your line of business. Having an accountant that specializes in your line of business will enable you to receive the highest amount of deductions possible. If you decide to use an accountant that is not familiar with your line of business you may not receive enough deductions to offset the amount of money you owe to the IRS. The accounting service that you choose should also be able to provide you with a complete analysis of your taxes. If you receive a complete analysis that includes information on all of the taxes due and the taxes that you expect to receive, you can prepare your financial statements correctly and thereby greatly reduce your tax liability.




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