PREPARING FOR BUSINESS TAX SEASON
How to Prepare For Tax Time
Start by gathering your documents and accounting records. Have your totals for all monies received and all expenses. Some documents from where you may need to collect information are checkbooks, cancelled checks, deposit slips, bank statements, sales slips, invoices, receipts, delivery receipts, inventory records, and any other financial statements. Read the list below and gather all of your necessary documents.
ADVERTISING COSTS- Money paid for things such as business cards, classified ads, commercials, business signs, etc.
CAR & TRUCK EXPENSES- These are expenses such as gas, oil, repairs, and insurance, depreciation, and license tags. This refers to vehicles such as cars, pickup trucks, vans, and panel trucks.
Business miles, parking fees, and tolls, business percentage made on vehicle loans, and the business percentage of the personal property taxes paid on the vehicle.
COMMISSION & FEES- Amounts paid other than contract labor.
CONTRACT LABOR- The amounts paid to independent contractors. Not the same as salaries and wages paid to employees.
DEPLETION- Deduction for exhaustible natural resources such as mineral.
EMPLOYEE BENEFIT PROGRAMS- Includes payments you make for your employees for accident and health insurance, term life insurance, dependent care assistance programs, etc. Does not refer to contributions you make on your own behalf.
EXPENSES FOR BUSINESS USE OF YOUR HOME- You can use a portion of your home mortgage, rent, insurance, maintenance, real estate taxes, and utilities. You can also use a portion of the depreciation the home if you own it.
INSURANCE- This includes payments for liability coverage on business property, fire, theft, and robbery. You may be able to deduct health insurance if self- employed.
INTEREST- Any interest incurred from loans used to finance your business.
LEGAL & PROFESSIONAL SERVICES- Includes fees for tax advice, tax preparation, and legal fees relating to the business.
OFFICE EXPENSE- Includes the cost of office supplies such as paper, toner, and postage. Expenses can also include cost of lawn care and a cleaning service.
PENSION & PROFIT SHARING PLAN- Contributions you make for your employees to a pension, profit sharing, or annuity plan, or plans for the benefit of your employees.
RENT or LEASE- For a vehicle, machinery, or equipment leased for business use.
REPAIRS & MAINTENANCE- Includes the cost of labor, supplies, and other items you spend for repairs and maintenance.
SUPPLIES- You can deduct the cost of supplies not included in inventory costs.
TAXES & LICENSES- Sales taxes on services or property used may be deducted. You can also deduct real estate and personal property taxes on business assets, employer’s share of FICA taxes, Federal and state unemployment tax paid, Federal highway use tax, and business permits and licenses.
TRAVEL, MEALS, & ENTERTAINMENT- Lodging and transportation expenses connected with overnight travel for business. Meals must be directly related to your business, not lavish or extravagant.
UTILITIES- Includes gas, water, electricity, water, trash, internet, and telephone service directly related to your business.
WAGES- Salaries, wages, and bonuses paid to employees.
OTHER EXPENSES- Some of these expenses may be start-up costs, dues, subscriptions, and messenger services.
*Give your documents and records to your accountant or tax preparer. If you are preparing your taxes yourself, make sure that you understand all tax filing requirements, forms needed, and possible deductions and credits for which your business may qualify.
Also, 321 Sun is here to help you with all of your individual and business tax filing needs. Contact us today for our thorough and accurate tax service.
How to Prepare For Tax Time
Start by gathering your documents and accounting records. Have your totals for all monies received and all expenses. Some documents from where you may need to collect information are checkbooks, cancelled checks, deposit slips, bank statements, sales slips, invoices, receipts, delivery receipts, inventory records, and any other financial statements. Read the list below and gather all of your necessary documents.
ADVERTISING COSTS- Money paid for things such as business cards, classified ads, commercials, business signs, etc.
CAR & TRUCK EXPENSES- These are expenses such as gas, oil, repairs, and insurance, depreciation, and license tags. This refers to vehicles such as cars, pickup trucks, vans, and panel trucks.
Business miles, parking fees, and tolls, business percentage made on vehicle loans, and the business percentage of the personal property taxes paid on the vehicle.
COMMISSION & FEES- Amounts paid other than contract labor.
CONTRACT LABOR- The amounts paid to independent contractors. Not the same as salaries and wages paid to employees.
DEPLETION- Deduction for exhaustible natural resources such as mineral.
EMPLOYEE BENEFIT PROGRAMS- Includes payments you make for your employees for accident and health insurance, term life insurance, dependent care assistance programs, etc. Does not refer to contributions you make on your own behalf.
EXPENSES FOR BUSINESS USE OF YOUR HOME- You can use a portion of your home mortgage, rent, insurance, maintenance, real estate taxes, and utilities. You can also use a portion of the depreciation the home if you own it.
INSURANCE- This includes payments for liability coverage on business property, fire, theft, and robbery. You may be able to deduct health insurance if self- employed.
INTEREST- Any interest incurred from loans used to finance your business.
LEGAL & PROFESSIONAL SERVICES- Includes fees for tax advice, tax preparation, and legal fees relating to the business.
OFFICE EXPENSE- Includes the cost of office supplies such as paper, toner, and postage. Expenses can also include cost of lawn care and a cleaning service.
PENSION & PROFIT SHARING PLAN- Contributions you make for your employees to a pension, profit sharing, or annuity plan, or plans for the benefit of your employees.
RENT or LEASE- For a vehicle, machinery, or equipment leased for business use.
REPAIRS & MAINTENANCE- Includes the cost of labor, supplies, and other items you spend for repairs and maintenance.
SUPPLIES- You can deduct the cost of supplies not included in inventory costs.
TAXES & LICENSES- Sales taxes on services or property used may be deducted. You can also deduct real estate and personal property taxes on business assets, employer’s share of FICA taxes, Federal and state unemployment tax paid, Federal highway use tax, and business permits and licenses.
TRAVEL, MEALS, & ENTERTAINMENT- Lodging and transportation expenses connected with overnight travel for business. Meals must be directly related to your business, not lavish or extravagant.
UTILITIES- Includes gas, water, electricity, water, trash, internet, and telephone service directly related to your business.
WAGES- Salaries, wages, and bonuses paid to employees.
OTHER EXPENSES- Some of these expenses may be start-up costs, dues, subscriptions, and messenger services.
*Give your documents and records to your accountant or tax preparer. If you are preparing your taxes yourself, make sure that you understand all tax filing requirements, forms needed, and possible deductions and credits for which your business may qualify.
Also, 321 Sun is here to help you with all of your individual and business tax filing needs. Contact us today for our thorough and accurate tax service.