Last Minute Bookkeeping Tax Tips
If you’re reading about tax tips mere days away from your filing deadline, you’re probably in the middle of a low-grade panic right now. Don’t get too stressed. Lots of people wait until the last minute and it usually turns out just fine.
As a small business owner, you’ve probably been too busy to do the prep work necessary to get your taxes in early. But we’ll talk about that later. What you need now is advice. Here are six tax tips to get you started.
#1 Tax time is easier to handle when you gather and organize your records
This is one of the secret tax tips every tax professional shares. It’s not really a secret at all but it’s very important. Accumulating your documents before you begin your tax journey serves several purposes:
- You won’t have to dig through your documents at the last minute.
- You won’t have to skip an important deduction because you can’t find your paperwork.
- It will take less time to complete your taxes and you can get back to running your business.
#2 Don’t forget your home office expenses
If you’ve neglected to take a home office deduction because you didn’t want to set yourself up for an audit, now is the time to rethink your position. As a small business owner, you work all the time, including at home. If you have an office in your residence, the IRS gives you two methods to calculate your deduction for reporting on Form 8829.
Simplified Option: You’re allowed a standard $5. per square foot deduction for your home office (used exclusively for business) with a maximum of 300 square feet.
Regular Method: Calculate your deduction based on the percentage of your home used exclusively for business plus other actual expenses.
#3 Tax-deductible mileage adds up
If you don’t have a clue how many business miles you put on your car, van, or pick-up, spend some time figuring it out. It might add up to a substantial deduction. The standard vehicle deduction for the 2018 tax year is 54.5 cents per business mile, 14 cents per charitable mile, and 18 cents per medical or moving mile. Be sure to compare the standard deduction to the actual deduction to make sure you get the highest benefit. Check the IRS Topic Business Use of Your Car for more information.
#4 Take a look at 199A to see if your business qualifies
If your business qualifies for 199A Qualified Business Income Deduction, you might be entitled to a 20% tax deduction courtesy of the Tax Cuts and Jobs Act.
#5 Get to know your business credits
If you qualify for business tax credits, you deduct them directly from your tax liability amount. Visit the IRS Business Tax Credit Page for more information.
#6 Start preparing for 2020 right now!
You don’t have to explain your tax tardiness to anyone (except the IRS) but it’s important to plan for a different outcome next year. Here are a few tax tips to help you get started.
- Consider a corporation or LLC status. It could reduce your tax liability.
- Digitize your financial documents and accounts for easier access.
- Use a mileage app to help you track and document your business miles.
- Consult with Goode Bookkeeping. We’ll take care of your bookkeeping and other small business services. We’ll keep you digitized and organized so you’ll have more time to run your business. Next year you won’t have to look for documents at the last minute. We’ll make sure your taxes are a done deal long before the deadline.
Give us a call
For a smoother 2020 tax season, call Goode Bookkeeping & Consulting today. You can reach us by phone at (860) 968-2345. If you’re busy filling out tax forms, complete our online contact form and let us know the best time to reach you.