3 Smart Moves With Your Business Taxes
When it comes to your business taxes, there are numerous tips that you can engage that will help you be smart about your business taxes.
Pay Your Taxes on Time
As a business owner, it is important to always pay your taxes on time. You need to pay your payroll taxes and quarterly taxes on time. Every month that you delay paying them will incur you fees that are going to increase your overall tax burned.
If necessary, you should borrow money to pay your taxes on time. You don't want to owe the IRS or the state government when it comes to taxes. Paying your taxes on time is one of the smartest business moves you can make and is where you should prioritize your money going each month.
Use the Mileage Deduction
Don't forget about the mileage deduction. It can feel laborious to keep track of all the miles that you drive for business purposes, but there are lots of apps out there that you can use that make this process much easier.
You generally get more money to deduct on your taxes when you deduct the mileage instead of your gas receipts. The mileage deduction helps pay you back for all the wear and tear that you put on your vehicle and can really make a difference.
For example, at the current rate of .58 cents per mile, if you drive 10,000 miles a year for business purposes, that is $5,800 that you can deduct from your taxes. Deducting mileage expenses can really add up and impact your taxes if you do a lot of driving for work. The miles you drive can help lower your tax bracket for your business.
Reimburse Yourself for Expenses
Next, make sure you don't pay out business expense through your personal accounts. If you pay for business expenses for your personal account, you need to then reimburse yourself for the expenses with your business account. By reimbursing yourself through your business account with your business money, you are signifying that what you purchased really was a business expense, which you can then write off.
When it comes to doing your business taxes, you need to make sure you pay your taxes on time. Not paying your taxes on time can be expensive. Instead of taking a gas deduction, take the mileage deduction. Remember to reimburse yourself for any business expenses you pay with your personal account so you can deduct the expenses.
Reach out to a tax return service to learn more.