We live in a world where even our side hustles have side hustles, and nearly 30% of Americans participate in the gig economy. Many people are opening small businesses online because the barriers to entry are low and the pandemic has caused a shift in how many of us think about work. So here are some tips for tax savings if you have multiple businesses.
Keep Your Tax Forms Organized
If you have multiple businesses, you are going to have lots of tax forms for each business, plus your personal tax forms. And with our ever-changing tax code, it’s important that you fill out your forms and organize them long before that next tax season hits.
eFile360 was built with people like you in mind. We help you get your forms filed and delivered, and we offer you the option to store your year-over-year form data so that you don’t have to start from scratch every time you want to work on your business taxes.
Maximize Your Deductions
From home office expenses to marketing bills, legal services, and office supplies, owning a business comes with the ability to deduct all kinds of things when tax time comes around. But part of being able to maximize your deductions stems from the way you organize your business expenses and receipts.
Sometimes it doesn’t feel worth it to keep the receipt for that run to the store to pick up a pack of copy paper, or to track the gas and parking expenses you paid during your last client meeting at the coffee shop. But those little bits add up.
In many cases, you can even deduct some or all of your auto lease and cell phone monthly payments. And with inflation creating more price increases for everything from gas to rent, you’ll definitely enjoy getting that money back at the end of the tax season.
The general rule for deducting expenses for your business is that if it is “ordinary and necessary” to running your business, it’s likely a deductible expense.
Make Some Big Marketing Moves
2021 was a time for explosive and uncontrollable growth, but 2022 is a great time to start using the more stable, post-pandemic landscape to start marketing and advertising your products and services a little more aggressively.
Home in on your niche, and use those social media platforms to cast a wider net and capture new customers. After all, it’s tax-deductible, too!
Embrace Bad Debt
Now that more businesses are operating online, there are lots of small businesses having to cope with trying to recoup money lost through bad debt. Business bad debt can be created when you loan money or materials to customers, suppliers, employees, and distributors, you offer credit sales to customers, and more.
So long as you can prove that the bad debt is directly tied to your business, and wasn’t a personal loan you gave to a struggling employee, for example, you can claim the amount lost as bad debt and deduct it from your taxes.
Contract and Freelance Labor
The gig worker economy is booming. More people than ever are going into business for themselves or partnering with a firm that allows them to create their own flexible work schedules.
If you find yourself needing to hire an outside contractor or freelancer, you can deduct the money you pay them in a similar way to how you deduct direct employees’ wages. So long as you’ve paid them $600 or more over the course of the year, you can issue a 1099-NEC (or a 1099-K if you paid them via third-party payment vendors like PayPal or ApplePay) and claim that money on your business taxes.
More Businesses Means More Tax Forms
58% of Americans pay to have their taxes done. And anyone who owns a business knows that there are a lot of forms to fill out if you are someone who owns multiple businesses, especially if you are like many businesses that have increased their use of freelance and contract workers since the pandemic started in 2020.
Your tax savings depend on your ability to create and organize accurate records every year. Why not let eFile360 help you streamline that process? Our services allow you to ease your tax burden in three simple steps:
- Sign up for a free eFile360 account
- Choose your form type and enter or upload your form details
- Complete your purchase and place your order
You can enter your data manually or even upload it from a spreadsheet. Our team will then process your order, which can include e-filing, printing, and mailing forms to recipients, TIN checking, and e-delivery.
Sign up for a free eFile360 account to help speed up your form filing process and keep your businesses straight come tax season.