A Special Report Provided by Palmetto Partners LLC
The 10 Tax Saving Tips Every Business Owner Needs To Know
- Your Tax Records: The IRS recommends taxpayers keep tax records for at least a three-year period. The government has to collect underpaid taxes from reporters. The IRS may collect additional taxes for six years from taxpayers who have failed to report income exceeding 25 percent of his gross taxable income. Therefore, records should be kept for at least six years.
- Estimated Tax: For estimated tax payment purposes, a year is divided into four periods. Each period has a specific payment due date. If you don’t pay enough tax by the due date of each of each period, you may be charged an underpayment penalty until the unpaid amount is made up. Due dates for payments are April 15, June 15, September 15, and January 15.
- Travel Expenses: Make the most of your travel deductions. When traveling for business, all airfare, lodging or any other travel related expenses are completely deductible. However, meals are only 50 percent deductible.
- Banking Fees: All banking fees are deductible. This includes ATM fees, credit card fees or other bank related charges.
- Corporate Events: You can deduct the entire cost of company parties if all staff members are invited. For other events that are used to promote your business, 50% of the expenses are allowable.
- Business Vehicles: If you have a vehicle that you use for both work and business, increase your business driving and decrease your personal driving to get the most out of the tax deduction for personally owned vehicles. Starting July 1st, the 2018 mileage rate allowed by the IRS is 54¢ per mile. Commuting to the office is not deductible, however, if a stop is made along the way for business purposes, the distance from that stop to your office is allowable.
- Tax Preparation: You can deduct the cost of all business tax preparation, but not the expenses for individual tax preparation.
- Professional Membership Dues: Membership fees in trade organizations, professional groups, and chambers of commerce are deductible. Dues for political clubs or recreational groups are not business expenses and therefore cannot be deducted.
- Last-Minute Deduction: Looking for a last-minute deduction? You may set up and fund a Self-Employed Pension (SEP) by April 15th and take the tax deduction for the prior tax year.
- Parking Fees: While parking fees are deductible, parking and traffic violations are not.