Taxes can be a challenging issue for many business owners in New York, especially for those at the helm of small businesses seeking to reduce their tax burden while also accurately filing their returns. Accordingly, the following tips can shed light what it takes to properly file taxes, in addition to introducing some potentially valuable deductions.
Time recommends thinking of what sort of tax forms might be necessary before deadlines loom. For instance, 1099-Misc forms must be distributed to any business associates paid in excess of $600 during the year. When it comes to employees, there are some options available that can decrease the amount of taxes a business owes. This can entail offering certain benefits (such as health insurance) in place of raises.
Tallying expenses throughout the year can also be exceedingly helpful. Waiting until the last minute to compile costs may end in disaster, particularly if some documentation is missing or otherwise unaccounted for. One should also refrain from mixing personal and business expenses. Setting up separate accounts for personal and business needs is highly recommended, as is utilizing separate credit cards for items unrelated to personal purchases.
Deductions are another important tax topic to many business owners. Entrepreneur offers some lesser known deductions, such as expenses necessary for getting a business started in the first place. When in possession of adequate documentation of purchases, business owners can claim a number of deductions related to getting their business off the ground. While most everyone is aware that gas expenses for business travel can be deducted, it’s also possible to deduct costs related to repair/maintenance and other essential vehicle expenses.