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Published by Brook Bay, 2021-03-13 13:27:43

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Use Small Business Tax Services To Avoid These Audit Triggers Did you know there are certain personal expenses you can claim on your tax return if you also use them for business? Two of the most common expenses in this category are costs relating to personal vehicles used for business and home office expenses. Claiming Vehicle Deductions You can claim a portion of your personal vehicle expenses if you use the vehicle for business purposes. S​ mall Business Tax Planning​ There are two methods available to claim expenses relating to a personal vehicle used for business: actual expenses incurred (prorated for the business portion) or the IRS mileage rate. You cannot claim both. If you do, whether on purpose or by accident, this will likely result in an audit. To calculate the business use portion, add all the miles travelled for business purposes, then divide that number by the total miles driven, and multiply by 100. This will give you a business use percentage. Once you have this percentage, use it to prorate your fuel, oil, vehicle insurance, parking, and vehicle repairs paid. This prorated amount is your business vehicle expenses.

Calculating Home Office Expenses Like vehicle expenses, home office expenses come with special restrictions too, and claiming them incorrectly can trigger an audit. When done correctly, claiming home office expenses can help reduce your tax bill. In order to claim home office expenses on your business tax return, the workspace must be used exclusively for conducting business on a regular basis. There are also two ways to calculate this deduction: calculating the portion of the space used for business or using a simplified method. Helping You Make Smart Business Decisions Not sure how to file your 1099s or the best software to use for payroll? We’re happy to help! Once your business is up and running, you’ll likely have these questions and more. Through our accounting advisory services we’ll help you keep your business running smoothly and show you how to put best practices in place so nothing gets missed.

I am actually able to understand Quickbooks, and I am able to not only track income and expenses for taxes at the end of the year, but track my cash flow to see how much the business is making and will make on a trajectory. Additionally, I have a much better understanding of the taxes I have to pay for myself and for my employees.

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