We’ve told you how a tax consultant can help improve your bottom line as well as how you can find a quality tax advisor for your business. Now that you understand why a tax consultant is an integral part of your business, you will want to utilize their services to the fullest. To do so, check out these 5 tax secrets they can help to leverage for you:
Secret #1: If you have a day job, but also have a side business, you still qualify for hundreds of additional deductions.
If you are self-employed, you qualify for a long list of additional tax deductions. The home office deduction allows you to deduct a percent of your home used for business. For example, if you use a guest bedroom or office space of your home for the business, and it makes up 1/5 of your living space, your consultant can help you get the deduction of that cost from your rent and utilities.
Secret #2: There are tax benefits everywhere, these are just a few:
- Deduct the sales tax you pay on the business's day-to-day operations as part of the cost of the items.
- Fuel tax and excise tax are deductible expenses you can claim separately.
- The employer’s share of employment taxes is deductible as a business expense.
- State income tax can be deducted through a federal return as an itemized deduction.
Secret #3: Keep track of any major equipment purchases for a big payoff.
Section 179 of the tax code allows businesses to deduct the cost of equipment and assets purchased within the tax year. The threshold amount is currently set at $500,000. Some purchases not eligible for this deduction include real estate, resale inventory and the purchase of property from a relative.
Secret #4: Don’t forget about software purchases, too.
Most software purchased for business use must depreciate over a 36-month time period, but there are exceptions:
- In service computer software from Jan 1st, 2003 through December 31st, 2014 qualifies for a 179 deduction as well. That means the complete cost of the software is eligible to be deducted for the year purchased.
- If your business software comes with the computer purchased and it is not stated separately, it is considered to be part of the hardware and depreciates over five years. However, the tax code allows you to write off the entire system within that first year.
Secret #5: Depending on the state you do business, you may qualify for research-based deductions.
Research and Development (R&D) tax credits are for the improvement or development of a product, which can include:
At Acena Consulting, we want to be the tax firm you use to unlock the secrets of maximizing your tax deductions. We work to help our clients achieve the best possible refund as well as strategize their financial outlook beyond just tax time. If you are seeking a tax consulting firm that will work to leverage every possible deduction to increase cash flow and grow your business, contact us today.