Tips From Business Accounting Firms in Dallas
Most small business owners spend at least 41 hours each year on tax preparation. Whether you do your own taxes or utilize the services of business accounting firms in Dallas, it’s essential to take the necessary steps to lower your tax obligation and situate your business so it’s in a strong financial position. Here are some helpful tax tips from business accounting firms in Dallas.
1. Recalculate Your Estimated Tax Payments
The past couple of years haven’t been typical for many businesses. Some businesses had to unexpectedly close their operations for months, while others found themselves facing overwhelming increases in the demand for their products or services.
Take a few moments to ensure that your estimated tax payments are still appropriate for your anticipated income. It makes little sense to overpay your estimated taxes and leave your business cash-strapped during the year. Conversely, you don’t want to underpay your estimated taxes, or you’ll potentially face costly penalties.
2. See if Payroll Tax Deferment is Still Right for You
A provision in the CARES Act permitted business owners to defer some of their payroll taxes for 2020 until 2021 and 2022. While this provision helped a lot of cash-strapped businesses continue their operations, you can’t take a deduction for your payroll taxes until you pay them.
Consult with experienced business accounting firms in Dallas to see if it makes financial sense to continue to take advantage of this deferment or if you’re better off paying the taxes so you can use the deduction.
3. Utilize the Home Office Deduction
The home office deduction is a valuable deduction for business owners that use a portion of their home exclusively for their business operations. Unfortunately, some taxpayers are reluctant to take it due to concerns they’ll trigger an IRS audit.
Business accounting firms in Dallas will confirm that you qualify for the deduction and let you know exactly what expenses you can deduct. Costs associated with furnishing and setting up your home office (like furniture, computer equipment, and office supplies), in addition to a portion of your home expenses, are typically deductible.
4. Seek Professional Assistance Well in Advance of Tax Day
Don’t wait until your taxes are due to consult with a CPA firm. Seeking guidance throughout the year will ensure that you’re aware of your potential tax liability and taking the right steps to lower your tax bill or better structure your financial obligations.
5. Contribute as Much as Possible to Your Retirement Plan
A simple way to reduce your taxable income while preparing for the future is to contribute as much as you can to your retirement plan. You can use an IRA, solo 401(k), or SEP IRA to make your contributions.
Want more tax tips? Contact Gurian CPA Firm to set up a meeting.
