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It's not easy being a small business owner this time of year. Stress levels are on the increase as owners scramble for receipts and hope they don't seem to be leaving cash on the table or opening themselves up to an audit.

The https://maqcpa.ca/corporate-tax-return/" target="_blank" rel="nofollow">tax slip filing deadline is right around the corner. April fifteen is the date for sole proprietorships, partnerships and indebtedness firms, whereas St Patrick's Day was the deadline for companies that report on a calendar year.

Small business homeowners got to ensure they've properly filed every form, properly itemized every deduction and write-off, and has their receipts handy just in case of a frightening audit. Whether or not this is often your initial year filing or your tenth, here are a number of tips to assist you to eliminate errors and navigate this year's business tax season:

1. Know your forms

The first step is crucial the right form to use. In essence, each business has to report its business earnings to the authority and pay taxes; however the precise forms you may use depend upon your business structure.

Partnerships report their income/losses/expenses on form 1065. If you're a sole businessman, then you report your business financial gain and expenses on a Schedule C attached to your personal income tax return. Likewise, if your business is associate degree LLC treated as a sole prop, you furthermore may use the Schedule C attachment. However, if you have got an organization or have electoral to treat your LLC as an organization, then you'll get to prepare a separate company income tax return with form 1120. Use form 1120S is that if you have got electoral S Corporation standing.

The authority provides useful tables that break down the required tax forms for every business kind.

2. Home office deduction

Many tiny business homeowners are intimidated from taking the house workplace deduction; as a result of they have been told it is a red flag for an authority audit. However, if you're licitly entitled to the deduction, you must take it, because it will add up to thousands of dollars in deductions. So as to qualify for the deduction, you wish to possess a fervent space within the home that you simply use entirely for the business and zip else (and proof of that fact).

Starting with 2013 come back, you currently have the choice to use a simplified technique for shrewd the house workplace deduction. Within the past, you required to feature up your actual prices (mortgage/rent, utilities, etc.) and multiply that figure by the proportion of your home that is dedicated to your workplace (see kind 8829). Now, you'll be able to opt to take a deduction of $5 per square foot of workplace space—with a $1,500 deduction cap.

While the simplified deduction can prevent time and work, it should offer you a smaller deduction. Savvy tax filers ought to calculate the house workplace deduction victimization each way and see that is a lot of advantageous. Of course, if you haven't unbroken track of your home expenses and do not have documentation to back it up, then you must take the simplified deduction.

3. Properly classify your office equipment

First-time and practiced business filers usually get tripped up once categorizing expenses as instrumentality versus provides. Provides embody things that you simply used throughout the year, like printer paper, pens, and printer ink.

Equipment (also referred to as capital expenditures) area unit generally higher-value things which will last considerably longer than one year. Computers, software, a piece of furniture, and servers area unit all samples of instrumentality. With the Section 179 deduction, you're able to write off the complete price of recent instrumentality in one year (up to $500,000), instead of taking depreciation over multiple years.

Add up any computers, software, and alternative instrumentality you bought in 2013 so as to urge a bigger deduction for 2013. And ensure to report these purchases on form 4562.

SEE ALSO: Work From Home? Your Taxes just Got Easier

4. Deduct your insurance costs

Any insurance premiums concerning liability, malpractice, workers' comp, and property are generally deductible as business expenses. Industrial vehicle insurance and life assurance premiums may additionally be deductible; however, rules vary by business type.

Business homeowners of sole proprietorships, partnerships, and S firms could also be able to deduct the premiums purchased medical and dental insurance for themselves, their domestic partner, and dependents. additionally, if you have got an organization with fewer than twenty-five full-time workers and pay a minimum of half your employees' insurance premiums, you'll qualify for a reduction up to thirty-fifth of the value beneath the tiny Business Health Care Act.

You can learn a lot of concerning insurance deductions with IRS pub 535.

5. Keep tabs on travel and entertaining expenses

Did you drive to satisfy with potential shoppers, fly bent on associate degree trade seminar or tradeshow, or take a shopper to dinner or a baseball game? If thus, you'll be able to deduct a number of these expenses.

For example:

If you picked up the tab for entertaining a current or prospective shopper, you'll be able to deduct five hundredths of the value as long as business was mentioned at the event or the diversion takes place in real time before or once a business discussion. Make certain to put in writing notes on the receipt, like which you were meeting with and what business was mentioned.

You can deduct a hundred of your travel prices if the first purpose of your trip is for business. If you get some time period and are able to keep a number of further days once the business is finished, that is fine. But, do not try and expense your fare for a seven-day trip to the cay for a two-hour meeting.

IRS pub 463 lays out all the main points for these necessary expenses.