7 Year-End Tax Tips for Small Businesses
Small business owners, it's time to consider some year-end tax tips.
As a business owner, this may be one of the busiest times of year for you. With less than two months left in the tax year (for most of us), you'll want to ensure that everything is in order, tax-wise -- and that you'll be able to take advantage of as many potential tax deductions as possible.
Consider the following seven tips for your year-end "to-do" list:
- Get assistance. If you don't already have one, you may want to look into hiring a certified public accountant who can look things over for you. But there are certain situations when you'll need a good tax lawyer, not a CPA.
- Throw a holiday party. Did you know that holiday parties provided for your employees can potentially be up to 100 percent tax-deductible? Also, parties for clients and associates may be 50 percent deductible. These deductions are subject to many rules, of course.
- Donate to charity. There's no better way to celebrate the holidays and get a nice tax deduction for your business than by making a charitable contribution. Of course, remember that not all charitable donations are tax deductible -- they must meet specific criteria.
- Set up a retirement plan. If you are a sole proprietor or self-employed, you may want to think about setting up a retirement fund of some sort before the year ends. There may still be time to max out your contributions so that you can lower your taxable income.
- Classify your workers correctly. Don't forget that it's crucial that you don't misclassify your workers. There are certain key factors that determine whether a worker is an employee or an independent contractor. This could cost you if you aren't careful.
- Keep good records. Make sure you're keeping good records of all relevant, tax-related documents for the year. This includes a record of all expenses, like receipts, for the many possible write-offs that your business may be qualified for.
- Consult with an attorney. Feeling overwhelmed? Sure, April 15 is months away, but it may be wise to consult an experienced tax attorney now, to relieve some of that holiday stress.
To learn more about potential deductuctions and other tax issues facing small business owners, check out FindLaw's section on Business Taxes.
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