The IRS has begun accepting 2014’s returns, and millions of Americans are getting ready to file their taxes. However, tax law can still be extremely complicated, especially for small business owners. For small business owners who have started working on their 2014 returns, here are five tax tips to keep in mind.
1. Remember Your Home Office Deduction
The IRS provides a simple way to calculate the deduction associated with using your home for business. This much simpler rule allots $5 per square foot of your office, up to 300 square feet. It does not, however, change the criteria for who may claim the deduction. Just remember that a portion of the home must still be used exclusively and on a regular basis for business purposes.
2. Standard Mileage Rates Have Changed
The standard mileage rate for 2014 was 56 cents per mile, which was half a cent less than the rate for 2013. Anyone claiming standard mileage should note that the mileage rate has gone up to go up to 57.5 cents for 2015.
3. Deductible expenses
You’re allowed to deduct the costs of running your business, as long as the expenses are ordinary and necessary. If you have an item that is used for both business and personal purposes, you can allocate the expense and deduct the business portion. Just be sure to document everything and retain any receipts. Assets must be depreciated, or deducted, over the course of their useful life if it extends beyond a year.
4. Self-Employment Tax Deductions
As you are calculating your adjusted gross income for 2014, don’t forget that you can deduct half of the amount you paid in self-employment taxes. You effectively pay tax as an employer and an employee, therefore you may deduct the 50% component of your self-employment tax that an employer would typically pay for you.
5. Don’t Forget Next Quarter’s Estimated Tax Payments!
Estimated taxes cover what used to be taken out of your paycheck by your old employer; Medicare, social security, and basic income tax are all covered by your estimated tax payments. Most small business owners are also required to file quarterly estimated tax payments – the only exceptions are those who expect to owe less than $1,000 in taxes, and those who did not have to pay any taxes during the previous fiscal year.
Nevada Corporate Headquarters is comprised of CPAs, small business advisors and tax professionals. These experts will ensure you are paying your fair share but not a dime more, Let Nevada Corporate Headquarters be your one-stop source for tax preparation, tax consultation and bookkeeping.
For more information, please contact a Nevada Corporate Headquarters Representative today at 1-800-508-1729, Monday thru Friday, 8 am – 5 pm PST.