Tax Relief Facts
Fun Facts About Tax Relief
Filing taxes is one of those things that no one enjoys doing. Whether you are a small business owner or a regular employee, you are probably going to have to suffer through your tax filing when tax season rolls around. These filings are particularly tough on small business owners, because they find themselves having to pay thousands of dollars in taxes, when they would prefer to use that money to grow their business or pay their employees. While taxes are no fun, we thought it was a good idea to provide small business owners with some interesting facts about tax relief and how it could impact their business:
- Legal Entity Impacts Taxes
Is your business a sole proprietorship or an LLC? Are you an S corporation or partnership? There are so many different legal entities that businesses can assume. And when you are starting a business, choosing an entity to assume may seem irrelevant. But did you know your legal entity can have an impact on the amount of taxes you owe at the end of each year? It is a good idea to talk with your tax accountant and lawyer about how you may be able to save on your tax filings by assuming a particular legal status for your business.
- Deductions are More Common Than You Think
Small business owners are always on the lookout for ways to save money on their taxes. From loopholes to deductions, every small business owner tries to save as much as they can. But you probably did not know that you can deduct a lot more on your tax statements than you had imagined. Every type of expense, whether it is ordinary or necessary, is deductible under the right circumstances. Expenses such as rent, supplies, furniture, electronic equipment, healthcare costs for employees and miscellaneous expenses related to the business are all deductible.
- Startup Expenses Can Help You Save
A number of small business owners make the mistake of assuming they cannot use the “startup expense” aspect of the IRS tax code until their business is fully operational. In fact, the IRS will allow you to make startup expenses part of your deduction even if your business has not officially opened yet. Every industry will have their own startup expenses as ordained by the tax code, which means you may want to check on the specifics of what you would be able to deduct as startup expenses during your upcoming tax filing.