It’s April, which means you can basically count on two things: rain and taxes. Both affect your business, but one comes with some major headaches. You can probably guess which one. We’ve compiled some current tax tips that will help minimize the confusion and, hopefully, do away with the headaches.
- 1. There are new rules for business losses, so take advantage of them if you can. Decide whether you want to carryback or carryforward net profit losses.
- 2. Depreciation is not a dirty word. Section 179 allows for immediate deductions of certain fixed assets and a 50 percent bonus depreciation for new assets. A word to the wise: a current deduction is better than a deferred one.
- 3. Know the rules in your state. Each state has its own filing requirements and is very strict in enforcing them. Read up on your state’s rules and if you’re required to file in another state, know their policies as well.
- 4. Extensions happen. Since you can report taxes close to the deadline, expect extensions to happen to your business and individual returns. And don’t worry—if you file for an extension, it doesn’t mean you’ll be targeted for closer examination by the tax man.
- 5. Switch things around. This would be a good year to accelerate income and defer expenses. Though it’s the opposite of what you’re used to doing, it could help minimize taxes through a different account method.
- 6. Wishful thinking. Unfortunately for small businesses, taxes will be going up. You can take certain steps to minimize taxes now and in future years when rates go up. Of course, each state is different.
- 7. Don’t throw it out. Good record-keeping can save you a lot of time, money and hassle. Copies of business tax returns, licenses, incorporation papers and capital equipment expenses should be kept indefinitely. As for tax-related documents like expense receipts, client 1099 forms and vehicle mileage logs, they should be kept for a minimum of seven years.
- 8. When all else fails, pick up the phone. If you have any questions, you can call 800-829-4933. It’s a trouble-shooting hotline set up by the IRS specifically for small business, corporations, partnerships and trusts.
- 9. Tick tock. When it comes to doing your taxes, the best thing to do is not procrastinate. Getting a head start means you’ll have more time to work out any problems that may come up.
Hope this information is useful and will help to keep you on your Exmark rather than in the office doing paperwork. Now go fill out those tax forms, if you haven’t already.
Note: Exmark Manufacturing are not tax experts. For specific tax related tips, you will want to contact and leverage your tax consultant.