SMALL BUSINESS TAX DEDUCTIONS - Reduce your taxes!

There are several costs that are tied to business operations that you can deduct:

Write-offs for Business Operation Costs

Employee Pay

Retirement Savings Plans

Insurance — Most businesses have general liability, property, and workers’ compensation insurance, but this can include any insurance necessary for your business, trade, or profession.

Interest Expenses

Certain Taxes — Federal, state, local, and foreign taxes paid as part of business operations.

OTHER COMMON DEDUCTIONS 

Advertising

Business use of your home (mortgage insurance, interest, utilities, repairs, and depreciation)

Licenses

Professional fees

Pension and profit-sharing plans

Business use of your car (depreciation or lease payments, gas and oil, tires, repairs, tune-ups, insurance, and registration fees)

Legal fees

Professional development and training fees

Tools and software

Security

Travel ( necessary expenses such as transportation, baggage shipping, meals, lodging, etc.)

If you’re planning on claiming small business tax write-offs, make sure that you have the necessary documentation to back it up.

PARTIALLY DEDUCTIBLE EXPENSES 

Not every expense is fully deductible, but you may be able to deduct other expenses partially. For example:

Only up to $25 can be deducted for gifts per client or customer

Up to 50% of the cost of meals and entertainment can be deducted

Luxury water transportation can be deducted up to twice the highest federal per diem rate

Restrictions and Exceptions

Personal expenses cannot be deducted as business expenses, but in some cases, if you use something both personally and for your business, you may be able to write off a portion of the cost. The IRS also has strict guidelines on which business expenses and how much of each cost, you can write off. Keep in mind; you are not able to deduct expenses that are considered “lavish or extravagant.”

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

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SMALL BUSINESS TAXES: WHAT YOU NEED TO KNOW

Running a small business is one of the most involved careers one can have. Most of the time, you are focused on the day-to-day concerns of running your business, but the financial aspect cannot be ignored. This financial aspect includes taxes. Taxes owed and small business tax deductions you qualify for can profoundly affect your business’s financial health.

Business classifications

First things first, the business structure you have chosen for your small business will significantly affect how you are taxed.

Sole Proprietorship

In a sole proprietorship, your personal and business liabilities and assets are not separated for tax-filing purposes. This is the default business classification.

Partnership

A partnership is a simplified business structure that can be used for businesses run by two or more people.

Limited Liability Company (LLC)

A limited liability company (LLC) is a middle ground between a partnership and a corporation. Members of an LLC have to pay self-employment taxes for Medicare and Social Security.

NEED HELP WITH OFFER IN COMPROMISE, TAX SETTLEMENTS, TAX PREPARATION, AUDIT REPRESENTATION OR STOP WAGE GARNISHMENTS?

 

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Corporation

If your business is structured as a corporation (C Corp), its activities are separate from shareholders. This protects from liability but requires corporations to pay income tax on their profits, usually at a higher rate. A corporate structure is recommended for larger scale, higher-risk businesses.

S Corporation

In an S corporation (S Corp), some profits and losses can be listed on your and other business owners’ personal income taxes. This allows for lower taxation. However, not all states allow this, and there are many other restrictions that apply to S Corps, such as having a maximum of 100 shareholders.

International Business

For tax purposes, an international business is one that is either foreign and conducts business activities within the U.S. or vice-versa. International businesses are required to operate within the Foreign Account Tax Compliance Act (FATCA).

Small Business Taxes

You are responsible for paying both federal and state taxes for your small business’s operations. Small business tax rates can vary from state to state, so it is essential to check with your state’s Department of Revenue. Typical small business taxes include:

Income Tax

Like personal income taxes, some small businesses pay taxes on the net income, with variations depending on business structure.

Employment Tax

If you have employees, you are responsible for paying payroll taxes, which include:

Federal Income Tax Withheld from Employees

Federal & State Unemployment Taxes (FUTA & SUTA)

Employer and Employee Social Security and Medicare Taxes

Unlike most taxes, the IRS requires small business owners to make deposited payments for these taxes at least once a month. 

Self-Employment Taxes

If you’re self-employed or a sole proprietorship, you will need self-employment taxes to contribute to your social security and Medicare benefits.

Excise Tax

Your business may be required to pay excise taxes on specific activities, sales, or payments. For example, if your company uses truck tractors on public highways or sells lottery tickets, you may be required to pay excise taxes.

Sales Tax

Your business may be obligated to collect and pay sales taxes for the goods or services you provide. In addition to federal sales taxes, you may also be required to pay state sales taxes, which can differ depending on the county or city in which you operate. 

Property Tax

If your business owns real property, fixed land, and buildings, you’ll have to pay property taxes. Taxes are paid on the assessed value, not the fair market value. The assessed value is determined by the local taxing authority, which will provide you with documentation and a tax bill based on their calculation. The amount you pay in property taxes largely depends on where your real estate is located.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief 

WHY IS YOUR TAX REFUND SO LOW IN 2021?

If you’re questioning “why is my tax refund so low in 2021?” you’re not the only one… 

Many taxpayers filing their 2020 returns are wondering the same thing. So, if your tax refund is less than expected in 2021, it could be due to a few reasons:

You didn’t withhold your unemployment income: The unemployment rate skyrocketed in the U.S. with millions of Americans filing for unemployment benefits. Many people don’t realize that unemployment income is taxable, and they don’t withhold enough (or anything) from their unemployment checks. 

The new American Rescue Plan Act provides an exclusion of $10,200 for unemployment income received in 2020. If you received unemployment, you may find the exclusion will reduce your taxable income and may provide you with an increased refund. If you filed your tax return before this change, check with your tax professional for more information.

You worked fewer hours or you have some employment gaps: While you may not have been laid off in 2020, many businesses choose to reduce hours. This could affect your refund between tax years, even if you work the same job. If this is the case, you have less income tax withholding, so less to get back as a refund in 2021.

No estimated taxes with gig income: Gig employment is on the rise due to more independent contracting opportunities. But not all gig workers know they need to pay estimated taxes for this type of income. Missing this step could mean an unexpected tax bill or a low refund in 2021. Check out our tax guide for gig workers for the essentials.

Not accounting for withholding across multiple jobs: Each job you have will result in you having to fill out a separate W-4 Form. If you didn’t account for each job across your W-4s, you may not have withheld enough, so your tax refund could be less than expected in 2021.

Not factoring eligibility changes for tax credits and deductions: There may be other impacts on your refund due to the credits you can take. For example, if you took advantage of rules that allowed for suspended student loan payments, it may have resulted in a lower student loan interest deduction, Or, if you didn’t pay childcare due to your children staying at home during coronavirus, your eligibility for the full Child Care Credit may have changed.

What to do if your tax refund is less than expected in 2020 or 2021?

If you think that you may need help filing your 2014, 2015, 2016, 2017, 2018, 2019 & 2020 Form 1040 tax returns or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 

Advance Tax Relief is headquartered in Houston, TX with a branch office in Los Angeles, CA. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

 

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#FreshStartInitiative

#OfferInCompromise

#TaxPreparation 

#TaxAttorneys

#TaxDebtRelief