While holiday decorations can evoke feelings of joy, peace and congeniality, they also inadvertently signal the impending arrival of a less popular time of year: tax season. With that in mind, it’s important to know it’s never too late, or too soon, to prepare for tax time. Armed with crucial information about acceptable tax write-offs, small business owners might learn to embrace the arrival of Uncle Sam.
Okay, that’s probably unrealistic. But knowing about some tax write-offs might put you and your company in a better financial mood.
For example, if you run your business from home, you’re not alone. According to an article on Open Forum, in 2011, the most recent year figures were available, only 32 percent of entrepreneurs who could write-off their home-based business actually do. Compare that with the 52 percent of small business owners who could take advantage of this tax benefit. For further information, consult IRS Publication 587.
In addition, the IRS introduced a simplified form for claiming expenses relating to home-based offices in 2013.
Meanwhile, if your small business doesn’t yet offer a 401(k), it might be wise to rethink that. Any time taxes can be deferred, which is one of the benefits of contributing to a retirement plan like a 401(k), is a financial boon.
Moreover, offering a 401(k) to employees might incentivize potential employees to join your staff or persuade current employees to stay.
If you or your company realized some gains due to the sale of assets during the past year, then it would be wise to offset those gains with some losses. Selling underperforming stocks, less-than-valuable real estate or devaluing assets like cars or trucks, can help balance your bottom line.