What You Need to Consider Regarding Business Tax Savings

If you’re a small business, you want to be in-the-know about any possible tax break there is. Nearly every form of business has rules outlined by the IRS, including partnership, sole proprietorship, a Limited Liability Company, Limited Partnership, S corporation and C corporation.

Financial expert Scott Estill offers workshops and advice for improving your tax status. Through his books he breaks down the topics that are relevant and beneficial to effecting change. They include:

Business Taxes: Whenever you start a business, you need a plan. If you just opened your doors this year, you may not have drawn up a plan yet – don’t worry. You might actually have some write-offs for your taxes 2019 that you didn’t know you had.

If you’re launching a new business in the future, it’s in your best interest to learn what are some tax deductions, so you can work this year on improving next year’s bottom line.

In addition to determining your profit motive and your tax return and filing requirements, some of the considerations for your commercial venture are:

Independent Contractors vs. Employees: This is a changing classification for the IRS. They alter the terms of contracting, so you need to determine the type of employment each of your partners has and understand what those terms mean. There is protocol to learn regarding how you handle workers for your business and whether to classify them as employees or independent contractors. Among other resources, the topics you need to research include contracts for employees and independent contractor agreements.

General Business Expenses: When questioning, “What are some tax deductions?” you’d be surprised at the options you have. Keeping track of mileage on your car when visiting clients, meals, etc. can provide you with good tax write-offs. It’s important to keep receipts from purchases, such as computers, printers and office equipment, because they’re business expenses you can itemize. Documenting miscellaneous business costs can amount to significant tax savings.

Business Travel: Traveling can be a huge expense for businesses. It’s always a goal to maximize your travel expenses so you can legally claim as much as possible. Consult an expert on tax laws to make sure you’re within range, and your certified accountant can make sure you include various costs you may not have thought about. You need to discuss tax rules and strategies for vehicle use and how to keep adequate records.

Food and Entertainment: You don’t want to join the many businesses that lose the opportunity to write off meals and other means of entertaining clients. You can claim thousands of dollars of deductions that way. There are expenses you may not think of, such as show tickets, live music and events, or sports fundraisers like a golf tournament held for a foundation.

Tax Strategies for Commercial Property: When you own business property, you can maximize your tax advantages in various ways. Other aspects of your business can be claimed; for instance, you can incorporate your commercial belongings and business equipment by following a financial expert’s tips for maximizing tax deductions.

Retirement Plans: You can both take advantage of personally and offer your employees a high-yield retirement plan. Helping yourself – and others you employ – plan for the future is a gift that keeps on giving. Certain programs offer you tax breaks, such as an SEP, SIMPLE and a 401(k), which can lower your tax threshold.

How to Benefit on Your Individual Taxes 2019

Whether you get out a calculator and manually determine your taxes or use Turbo Tax, it’s daunting, especially when you aren’t a financial expert. But there are a lot of options for people looking into “what are some tax deductions?”

It involves identifying your adjusted gross income (AGI) and your marginal tax bracket, of course. And it’s a good idea to look at what the coming year looks like, because you need to make changes now.

Some tax deductions have thresholds, so you need to become aware of those. For instance, the medical expense deduction is only applicable if it was a certain percentage (typically in the 7% range) of your income. Things like education write-offs only apply if your AGI is below a certain total also.

Home Office: If you’re like about half of working Americans, you have a home office. If your small business is run from a remote workplace, be sure to claim deductions associated with it. You can write off a percentage of your mortgage because of home depreciation. Consult an expert who understands the rules, and don’t always assume you’ll be audited if you employ this savings tool. As long as you’re staying within the legal confines of what is allowed, that’s all you need to worry about.

Retirement: Putting money away for retirement is typically a good idea. Maximize your 401(k) especially if your employer has a matching program in place. You may want to shift retirement contributions to an after-tax investment program such as a Roth IRA or other investment option as well.

According to an article in U.S. News & World Report, you don’t want to wait until next month to look at your finances – the end of the year may limit the possibilities for benefits to your taxes 2019.

“There are very few (tax-saving) things that we can do after the start of the year,” says Ed Zollars, a CPA and instructor with Kaplan Professional Education, which provides continuing education classes and instruction for professional certifications. To apply tips for maximizing tax deductions for this year, you need to implement them by the last day of December. And it’s a good reminder that planning your taxes 2020 now will likely give you an advantage.

The article offers some tips for maximizing tax deductions, including:
• Make 401(k) and HSA contributions.
• Make a charitable donation.
• Wait to purchase more mutual funds.
• Move from a traditional IRA to a Roth IRA.
• Look at your capital losses.
• Meet with a financial expert.
• Invest in Opportunity Zones.

Donating Your Vehicle through Cars2Charities

You probably don’t have so many tax write-offs that you can’t entertain something more. And sometimes one decision puts you over the top, in terms of deductions, and you’re sitting pretty for the new year.

If you have a car you’ve been considering replacing, you may want to do that – stat. Of course, you can donate a car to charity any time of year, but if it’s possible to do it quickly, you could benefit your latest tax outlook.

Many financial experts outlining tips for maximizing tax deductions suggest that a car donation to charity is an easy method for doing so. It’s something nearly every American can relate to, and if you’re in a position to replace what you’re driving, you can experience how easy it is with a phone call.

To donate a car through Cars2Charities, you simply call the company at 855-520-2100 or donate online. That’s pretty much the extent of it. We schedule a time to pick up your vehicle – when it’s convenient for you. We handle the paperwork, including the title transfer.

If you’ve wanted to go green and invest in a hybrid or an electric car, it’s a double benefit to you. You’ll save money on gas while boosting your bottom line with a tax-deductible donation.

There’s also an added tax advantage with Cars2Charities. We inspect donation cars to determine if they would benefit from some improvements, which tends to maximize the donation, increasing your write-off. We’ve researched it and found that after our changes, donation vehicles tend to sell for 25-50% more than those without them.

It’s a gift – both to the charity you choose to benefit – and to yourself.

Types of Vehicles Qualifying as Tax Deductions Donations

Though the traditional vehicle that comes to mind when you picture a car donation is a simple SUV or sedan, there are many that can become write-offs. Anything with value can be transferred to become a gift to a nonprofit to boost any cause you care about.

An RV donation to charity is accepted by Cars2Charities, and the process works the same as a car donation. Even families who are leaving their camping days behind after years of fun in the forest can benefit from a car donation tax deduction.

The same is true for a fisherman or a water skier. When your watercraft is ready to retire, you can make a boat donation to charity.

Whole groups such as motorcycle club members can make donations to help their charity of choice, plus they each get a tax break.

A golf cart is a tax-deductible donation also. A vehicle donation is a great option for people who live in communities that use electric vehicles to get around the neighborhood and don’t want to be bogged down with the task of getting rid of their old ride.

Even vehicles like Sea-Doos and ATVs are accepted as tax-deductible donations.

There are a lot of options for lowering your tax base, but you want to look quickly – before the end of the year. Many are complicated and require the help of a broker or agency.

But a car donation to charity is one of the simplest and fastest forms of tax deduction donations. It’s worth the effort to look into ways to improve your “taxes 2019” profile, because it’ll get you thinking about 2020, and the sooner the better.