Small Business Tax Tips

One for You, Nineteen for Me: Tax Tips for Small Business Owners

Posted by Stacey Papp

It’s early April. Do you know where your tax paperwork is?  Tax Day looms large in the minds of business owners everywhere, and it’s safe to say that many dread the annual scramble. There are ways to make this time of year less stressful, however, and while it may be too late to put some of these into action, it’s never too early to start thinking about next year. Some important considerations for small business owners include: 

Deduct ‘Em if You’ve Got ‘Em 

Two important tax breaks for small businesses have been extended for tax year 2015: Section 179 and bonus depreciation. Section 179 allows businesses to deduct the full price of qualifying equipment or software purchased or leased during the year. The tax-extension bill makes permanent the $500,000 maximum deduction for new and used equipment and applies to almost any kind of equipment, including office furniture, computers and printers, software and vehicles.

Bonus depreciation, which allows business owners to depreciate 50% of the cost of new equipment purchased in 2015, was extended through 2017. Both incentives can be used together.
These deductions can help businesses acquire the technology they need to streamline their operations without worrying too much about the total cost. The IRS site has more info.

Don’t Forget: ACA
The implementation of the Affordable Care Act (ACA) will affect some small businesses at tax time. Most significantly, businesses could face tax penalties for failing to provide health insurance to employees or for failing to report to the Internal Revenue Service the type of coverage they have provided for employees. 

Since the beginning of 2016, the ACA will apply to businesses with 51 to 99 employees, requiring them to offer health insurance to at least 70% of their full-time-equivalent employees or face a tax penalty of $2,000 per employee. There are also reporting requirements that go along with the ACA: employers must report the cost of health coverage they provided on each employee’s W-2 form or face fines of $200 per employee.

Don’t Wait Until April 14 to Think About Taxes. 
Don’t treat taxes as something to only think about once you really have to. Plan year-round for your taxes – it will make things less complicated and open you up to more money-saving options.

Go pro. You may be the best at what you do, but that doesn’t make you a tax expert. Hiring a professional to do your taxes might cost some money upfront, but could save in the end through tax breaks and deductions you might never find on your own.

Stay current. Pay attention to the news and any laws that could affect your business. If you aren’t sure if you’ll be affected, or how, ask your accountant.

Save everything.
Keep all receipts and make notes about what you purchase and why. It can seem excessive, but anyone who has ever been audited will tell you it’s no picnic, and keeping all necessary paperwork in order and with proof of legitimacy will help give you peace of mind and save time in the event of an audit.
Keep your operations streamlined. Look for ways to integrate the systems you use every day (dispatching software, reporting tools) with your accounting system (and don’t forget, equipment and software is tax deductible). This will make it easier to figure out the financials come next Tax Day.

For more tips on how to keep your business running in tip top shape, check out our blog.

The above is for informational purposes only, you should contact a tax professional where appropriate.  Fleetmatics does not warrant or represent the information contained in this post. 

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For more tips on how to keep your business running in tip top shape, head over to our blog.