Starting a Business: Tips for Handling Small Business Taxes
Are you a sole proprietor or other entrepreneur looking for helpful tips on starting your business? At ZworkSpace, not only are we committed to providing small businesses, satellite teams, and sole proprietors with the resources necessary to thrive in their work, but we also want to give businesses an excellent foundation of knowledge to help them get the most out of their professional aspirations.
With tax time only a few weeks away, startup owners and freelancers may be wondering what else they can do to save when they're filing their taxes in the coming year. Here are some helpful tips to consider for your business taxes:
Deduct your office expenses.
Whether you have a home office or are working a co-working space, you can deduct expenses related to your work setup. Deductible items can include mortgage or interest payments, insurance, repairs costs, and utilities like Internet service. Keep in mind, however, that it is necessary to determine what portion of your home is dedicated to running your business. Fortunately, there is plenty of tax software that can do the calculations for you.
Deduct auto expenses.
Much like deducting home office expenses, you have to calculate what percentage of the time your car is being used for work-related travel. This percentage can then be applied to overall car expenses. There are two main categories of deductions for car-related expenses: the IRS's mileage rate or your actual car expenses, which include gas, auto repairs, and insurance payments. Compare your savings between the two before filing.
Get big savings from your business equipment.
Under Section 179, small businesses can avoid tracking depreciation by treating purchased equipment as a business expense during the year it was purchased with an upper limit of $500,000. Items can include anything that a small business owner needs to run a business, from computer-related goods to industrial-grade ovens, and even office furniture. Use a Section 179 calculator to determine how much you can save by with the lump sum of your small business expenses. Keep in mind, if you do use this to save during tax time, you must file a Form 4562 to do so.
Whether you're starting a business or transitioning into a new phase of business operation, ZworkSpace provides a variety of packages to help you save time and money and focus on letting your business thrive. For more information about our membership offerings, or to schedule a tour of our office space, contact us today at info@ZworkSpace.com or 714. 253. 7788.