Business Tax Deductions You Didn’t Know Existed

Business Tax Deductions You Didn’t Know Existed

There’s nothing worse than realizing you could have saved money on your taxes after you’ve already filed them. It’s easy to overlook some of the lesser-known deductions that exist, but doing so could cost you a pretty penny. Sometimes business owners wait until the last minute to do their taxes, and that rush prevents them from researching money saving options at their disposal. If you don’t have a tax planner by your side, you’re left guessing about your best options. Start keeping records of your tax write offs now, and your 2017 tax day will go much smoother.

Home Office

Your home office probably doesn’t have to be as complicated as you think. So long as you have a dedicated computer for work and a space to get business tasks done, you can probably make a home office deduction on your taxes. That square footage isn’t the only thing that counts as business expenses – your mortgage, electricity and insurance costs count as well. Some people worry that a home office deduction is a red flag that invites an IRS audit, but if you are actually using it for business you have nothing to worry about.

Furniture

Buying office furniture may seem like a big investment initially, but it can save you money come tax day. Your office chairs, tables, filing cabinets and desks are all deductible if you’ve purchased them since your last tax filing. There are several types of furniture deductions you can take utilize. You can either deduct the total cost of the furniture at once, or you can reduce your tax burden incrementally over seven years. Base your choice on when you anticipate benefiting from that money most.

Driving Expenses

Hitting the open road doesn’t have to hit your pocket book hard. If you keep careful records of your driving miles, the government is more than willing to give you a break on your taxes. Some things you’ll want to keep on record are dates, miles driven, parking expenses and explanations for your trips. Make sure to keep your receipts on hand if you don’t have a receipt-scanning app on your phone. When you have that information at hand, you can easily save some money that would otherwise be gone forever. Gas mileage deductions vary by year, and for 2016 they are at 54 cents per mile driven.

Travel Costs

If you’re a frequent business traveller, you stand to save a significant amount of money with your expenses. You can deduct the total cost of your hotel stays from your taxes, so it’s worth springing for a few extra stars if you have the opportunity. Planes, trains and car expenses don’t have to set you back either. Exactly 100% of those costs can go directly towards deductions. That includes related expenses, such as tipping your flight attendant or visiting a laundromat while on the road. You can even write off your meal costs while travelling, albeit at a reduced deduction rate of 50%.

Education

If you want to be a master of your trade, you need to have the smarts to compete. Luckily, if you have education costs, you can write them off of your taxes if they relate to your current job. The IRS is strict about this write off though; you can’t own a bakery and go to school for your Masters of Architecture free of charge. If you want to improve your skills for your current position, this tax break gives you the chance to expand your career in a way that’s financially sensible. If you believe the best business owners are always learning, this incentive might be for you.

When it comes to taxes, every business owner wants to minimize their expenses. Tax deductions give you the chance to save money on the things you’d probably buy anyways, so it’s a no-brainer to take advantage of them. Of course, the examples above are just a few of the tax write offs you should be aware of. Our experts can help you reduce your tax burden, and ensure you won’t miss any deductions for the upcoming tax season. When we provide tax services, we work with businesses through the entire year, so no tax saving opportunity slips through the cracks. Learn more about our tax preparation services, and call today!

Money Saving Tips for Small Businesses

Money Saving Tips for Small Businesses

Nobody knows the value of a dollar quite like a small business owner. Whether you’re just getting started or have been building your business for years, you want to make every penny count, so you can grow as quickly as possible. One of the best ways to save money is to develop new habits that add some frugality to your daily routine. Part of our duties at Motl Accounting is to provide the best advice to our Chicagoland clients in order to help them be more profitable and successful.  It takes a little motivation to change how your business operates – but as an entrepreneur, we’re sure you’re up for the challenge. Here are some small things you can do to make the most of every dollar:

Pick Up Deliveries

It might be a little less convenient, but the amount of money you can save by picking up nearby equipment and products really add up over time. Skip the middleman and you could avoid a few hundred dollars in delivery costs per year. You can set your own guidelines, but anything within a half hour that fits in your car or truck is usually worth picking up yourself. Your time is valuable, so don’t overdo it and become a one-person delivery service, but there are plenty of situations where the extra effort is worth the cost savings. (more…)

Spotting Red Flag Accounting Practices

Spotting Red Flag Accounting Practices

If you’ve ever attempted a quick Google search for CPAs in your area, you’ve probably learned there’s no such thing as a quick search for an accountant. Accounting is all about the details, and when you’re trying to find someone to handle your finances, it pays to be thorough. Your money is at stake, and you should only choose someone who has your best interests in mind. A small amount of accountants have questionable (to say the least) practices, and knowing the warning signs makes a big difference:

Outdated CPA Certificate

There’s a reason many people prefer to work with a CPA rather than a general financial planner: the title requires a higher level of expertise. In addition to years of schooling, CPAs complete exams to ensure a high-level understanding of auditing, business concepts, financial rules and reporting. It’s worth checking out the Illinois CPA Society database to ensure your accountant has retained their license. (more…)

5 Small Business Bookkeeping Errors + Tips to Save You Money

5 Small Business Bookkeeping Errors + Tips to Save You Money

If you’re a small business owner, you know that bookkeeping is both essential, and stressful. For those of you who have decided to keep track of your books on your own, you might actually be costing your businesses rather than saving money. Below we’ll explore a few common DIY errors, and the small business bookkeeping tips to help you save in the long run.

5.) Writing Off Items Incorrectly

Purchases must be logged correctly in order to provide you with accurate numbers when filing your taxes. For example, major purchases (assets that will be used over the course of a long period of time) are different than immediate expenses, and therefore should be dealt with differently. A major expense like a new printer/copier machine should not be written off as a direct expense, but rather should be depreciated over time. (more…)

Could You Benefit From a Personal CPA?

Could You Benefit From a Personal CPA?

Do you need help preparing your taxes? Do you want to plan for retirement, but aren’t quite sure where to start? A personal CPA can help you with these tasks and many more related to your personal finances—find out all you need to know in this month’s post.

Ÿ What is a CPA (Certified Public Accountant)?

All CPAs are accountants—but not all accountants are CPAs (AICPA). To earn CPA licensure, a certified public accountant must complete a high level of accounting education, gain experience in public accounting, and pass their state-regulated Uniform CPA exam. Once an accountant has met these stringent requirements, he or she can practice accounting for all sorts of clients including non-profits, government agencies, privately owned companies and individuals. (more…)

Bookkeeping Basics: What Is Cost Accounting?

Bookkeeping Basics: What Is Cost Accounting?

Cost accounting is a technique used to determine the best financial course of action. The primary purpose of cost accounting is to help decision-makers make decisions. By analyzing the cost of products, services, and projects, accountants can advise businesses of the best course of action regarding a particular transaction. To put it more simply, you calculate the elements of cost for product process (raw materials, labor, and expenses/overhead), compare that cost with the product price, determine the business’s revenue, and decide if and where savings are needed.

 

Cost accounting doesn’t have a singular approach. Cost accounting methods include: (more…)