Business Tax Tips

Take control of your tax bill! Learn how to set up transactions for the lowest legal taxes. Wis combines tax, business and estate planning to achieve your goals. He may be the last professional you will ever need:

  • Expert tax return preparation
  • A written plan using Wis’ custom Tax Mastery© on how to pay the lowest legal taxes
  • A monthly WealthWISe e-letter and personal mentoring on how to control taxes in the future.
  • Confidence to face the IRS.
  • Wis can tell you what the IRS does not.

THE SYSTEM

The system begins with examining your latest tax return, free of charge, to see if I can help you. I provide tools to help you get together your information. I use Proseries professional tax preparation software. I use the Tax Mastery©, an Excel model, driven by Visual Basic, that helps me find tax savings in client tax returns and provide each client with personal written advice on ways to legally lower taxes.

TAX FORMS

Business tax returns include:

  • One person businesses Schedule C
  • Corporations Form 1120
  • S corporation Form 1120 S
  • Partnerships & LLC’s Form 1065

TAX RECORDS

Most of the tax benefits lost in IRS audits are lost because of poor records. The IRS and the Courts are getting tougher on what proof you need, so don’t lose a deduction that you deserve because you can’t prove it. At the same time, don’t waste time on records you don’t need. Different businesses need different records and we can tell you what.

TAX BASICS

To beat the tax system you must know the rules. What can you deduct? To be deductible an expense must be “ordinary and necessary” for your business. Thousands of court decisions have tried to define “ordinary and necessary.” Basically, “ordinary” means expected in your business, and “necessary” means appropriate and helpful to your business. For example, you may not deduct personal expenses because they are not necessary to your business and you may not deduct extravagant expenses because they are not necessary.

Equipment & Furniture – Even if ordinary and necessary, an asset with a useful life of more than one year, like buildings, furniture and equipment, is normally depreciated (deducted ratably over its useful life). In 2014 taxpayers were allowed bonus depreciation — 50 percent of the cost of new property (not real estate) in the year placed in service. See “Sunset” below.

Section 179 deductions. A business could deduct up to $500,000 of the cost of de-preciable assets (other than buildings) placed in service in 2014. This limit was reduced when dollars spent on such assets exceed $2,000,000. The section 179 deduction cannot exceed business income. Certain restaurant and retail space improvements may qualify for similar treatment on up to $250,000.

Sunset: large Section 179 amounts, bonus de-preciation ended at the end of 2014. Congress may extend these. Wis is watching these.

Employees. As an employer you must withhold various taxes from your employee’s wages and deposit them to a specified bank on time or face stiff penalties. See IRS Circular E for rules.

Self employment tax.-A person who is in business alone, in a limited liability company or partnership must pay the self-employment tax plus regular taxes on earned income. Combined income and self-employment taxes can exceed 50%. S corporations are another matter.

Estimated tax payments. If you are not an employee, you are supposed to make quarterly payments of estimated taxes. Wis advises keeping estimated tax payments low, to avoid giving the Government the use of your money interest free. If you pay too little, you may pay a penalty, but at a low rate.

TAX SAVERS

Your business is a great tax shelter, and here are some tips on how to use it:

More Deductions. Wis shows you how to find business deductions in your personal as well as business checks & charge statements.

Reduce self-employment taxes. If a deduction could be business or personal, treat it as business, to reduce the self-employment tax. For example, at least a portion of tax preparation costs are business.

Depreciate or not. We can show you when to depreciate and when to use the section 179 deduction.

Health insurance premiums. You can deduct these. What about Medicare premiums?

Vehicles: Save more. Compare deducting actual expenses and depreciation with deducting the standard mileage rate – 56.5 cents in 2013.

Big Vehicles, Big Savings. With over 6,000 gross vehicle weight, these are not subject to the dollar limits on depreciation that apply to most vehicles.

Meals & Entertainment. Half is better than nothing.

Travel. Too many possibilities to discuss here. Take advantage of deductions on expenses of overnight business travel: fares, lodging, car rental, meals, tips, internet, and dry cleaning. Take your spouse as an assistant.

Tip: “Per diem” rules allow you to deduct as travel expenses a specified amount per day for lodging, meals and incidental without receipts.

LLC member’s or Partner’s costs. A member/partner can decrease yourself employment tax with unreimbursed business expenses.

Business seminars. Deduct cost plus travel. Home office. Don’t go home without it.

Hire the kids. Deduct over $6,000 in wages paid your child. Yet they pay no taxes.

Telephones. Deduct a second line.

Retirement Plans. Dynamite! Deduct contributions to retirement plans, where it grows tax free. Different plans have different creation and contribution dates. Come in and find out which suits you.
There are hundreds of other deductions. Wis shows you how to find business deductions in your personal as well as business records. Here are a few:

There are hundreds of deductions, I show you how to find business deductions in your personal as well as business records. Here are a few:

  • Internet service
  • Cell phones
  • Professional dues
  • Bank charges
  • Professional fees
  • Business related subscriptions
  • Pager

Meet with me for a free half hour review of your taxes, to see how much you can save if I prepare and plan your taxes.

About Wis Laughlin

I help clients with tax preparation and IRS representation, estate planning, and complex contracts, including LLC's. As a former IRS tax attorney in their National Office. Law.com picked Wis in 2017 and several prior years as one of the Top Tax and Estate Lawyers in Tennessee. I am your advocate, not your accountant. I don't tell you what you can't do. I show you how to do it.
This entry was posted in Business Tax and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s