When you run a small business, you know all about the importance of small business taxes. These taxes to keep the government up and running and help your pocketbook stay afloat. If you don't understand small business tax deductions or tax laws in general, then you need to get educated. Here are some things you can learn before you file your first tax return with the IRS:
There are many kinds of small business deductions that you can take advantage of when you file your tax returns. Many people do not take full advantage of these deductions because they feel it is too much work. They think it is impossible to get a return with enough deductions to make a dent in their profits. This could not be further from the truth. In fact, it is very easy to get a great return on your business taxes if you take the time to educate yourself and seek out the appropriate deductions for your business.
If you run a small business, you probably have itemized deductions of some sort. In addition to small business taxes, there may also be property taxes, payroll taxes, and other miscellaneous taxes you are able to claim on your tax return. If you run a home business, you may also be eligible for tax credits that are related to the use of your residence as a business location. To qualify for these credits, you must be using a portion of your residence for your business solely. Some examples of this include a home office, part-time employment, or vacation home use.
Another great way to save money on your taxes is to include your business equipment in the purchase price of the used equipment or materials purchased for your business. This includes computers, printers, faxes, etc. Even if you only paid $200 for the items, you can claim a tax deduction of up to half of the total cost. If you are unsure what percentage you can legally claim, consult a professional who can assist you in figuring out the best percentage to include in your claim.
You may also qualify to receive a small business tax credit if you use certain types of heating equipment in your business. In order to determine whether you qualify for this tax credit, consult a professional tax expert. He or she will be able to help you determine which types of heating equipment and fixtures will qualify, as well as what types of fuel will be eligible.
As with any tax issue, it is extremely important for small business owners to keep fully informed about their obligation to their small business. Taking small business taxes seriously . . . . . . not only can help you avoid penalties; it can also save your small business from financial hardship in the future. The knowledge you gain from knowledgeable sources will give you invaluable advantages as you plan your small business's finances in the future.