Halloween is almost upon us: horror movies are starting to air on primetime TV and styrofoam tombstones are cropping up on suburban front yards. But what’s scarier than goblins and ghouls? Tax season! That’s why I’ve decided to collect some tax season “treats”–and tricks– for my readers this October.
Don’t miss out on the tiny write-offs. Office supplies like pens and paper might seem insignificant, but they can certainly add up!
Know what a tax credit entails. Unlike ordinary deductions, tax credits directly reduce your tax liability. If your company falls into a certain category–like startups or renewable energy initiatives–you could be in for big savings.
Give “benefits,” not bonuses. Of course you want to reward good performance, but instead of giving employees monetary bonuses–which are subject to taxation–provide them with other benefits: gym memberships, free lunches, or on-line courses. You’ll be able to write these off as expenses later.
Don’t forget 1099s! If you hire outside contractors and pay them more than $600, you’ll have to file a 1099 form. This might apply to your graphic designer, web developer, or lawyer.
Watch out for “ghost assets.” The aptly named ghost asset is a mystery to many small business owners. The term usually refers to unaccounted inventory, because it is missing or damaged. Avoid forgetting about these by keeping good inventory records.
Remember these tips and hopefully your tax season will be a walk in the park–rather than a walk in the graveyard!