Business Tax Preparation – Tax Tips for Small Businesses

Tax Tips for Small Business Owners

Small businesses sometimes feel dwarfed by the large corporations that appear to dominate the modern day. However, being a small corporation has its hidden benefits. Business tax preparation is key. The government has provided small businesses with certain tax deductions that can truly be rewarding. Such deductions are an effective way to keep any company out of the red. Perhaps you have heard of some the simple tax deductions outlined below. Here are some tax tips for small businesses:

  1. Phones – We’re not talking about office work phones, but actually cell phones! Cell phones are becoming more and more prevalent in the business world. No longer are financial matters restrained to the office (unfortunately right?). Cell phones enable businesses to keep up in the competitive world we live in today. Luckily, the IRS has noticed this and business owners can now write off the entire amount of their cell phone costs. The only stipulation is that the business owner must have a home phone or a land line to qualify for this deduction.
  2. Charity – Small businesses that are structured as LLCs, S-Corporations and Partnerships can make charitable donations and pass the deduction on to the business owner’s individual tax return.
  3. Marketing/Advertising – Nearly all small scale advertising can be added to an expanding list of deductibles. Yellow page advertisements, business cards, flyers, or even sponsorship of local sports can qualify as tax deductions.
  4. Office Supplies and Technology – Small businesses are constantly expanding, and thus, constantly spending on new supplies. The tax advantage is that this spending can be manipulated into tax deductions. Whether it is a new computer, phone, scanner, or any recently purchased device, the cost of expanding can be alleviated with careful attention to allowable tax deductions. Talk to your tax advisor to see what qualifies as an office supply deduction.
  5. Entertainment and Dining – Businesses can claim tax deductions for meals and entertainment. Although this doesn’t mean that those coffee runs are now deductibles, business owners can write off true business meals as deductions. So, the next time you meet with a client, write it off as an expense. It is best to keep your receipts though. We don’t want you to over save and have an unfortunate trip to see an IRS agent.
  6. Planes, Trains and Automobiles – Well, not really planes and trains, but you can receive tax deductions for automobile expenses if you use your own car for business or have company car. These deductions are further broken down into two categories, both of which can be highly rewarding for your wallet.
    1. The “Actual Expense Method” is tedious, but also the most efficient way to receive tax deductions for automobile expenses. It involves keeping a detailed log of all business-related costs of owning and operating an automobile.
    2. A simpler way of tracking automobile costs is the “Standard Mileage Rate Method”. Every year the government determines a standard amount that can be deducted for each mile traveled. For instance, the rate for 2013 is 56.5 cents per business mile. Keeping track of how much you drive for business really does add up and, the more you drive, the closer you get to that new car!
    3. Business Trips – Who doesn’t enjoy paid vacations? But, in all seriousness, it is one of the best tax deductions. Instead of the typical 50% deduction granted for meals and entertainment, business trips can be deducted at 100%. That’s right, those planes, trains, and automobiles really are all deductions, as well as hotels, taxis and any other expense associated with a business trip.

Be prepared for next tax season. By using a few of these deduction tricks described above, you too will have a better chance at surviving the next tax year. Remember that business tax preparation is key!

If own a small business, our experienced tax professionals can help you effectively handle all of your business tax issues. For more information about our full range of business tax and accounting services, visit us today at Contact us by phone at (866) 676-9417 or by email at to receive a free, no obligation consultation.