Additional menu

eFile360.com

Where e-filing information return forms comes full circle. We support 1099, 1098, W-2, and Affordable Care Act forms.

business taxes

Lower Your Business Tax Liability: Did You Miss These 6 Deductions?

By

Planning ahead and understanding the various deductions available are key components that help lower your business tax liability. For business owners, it is important to understand their tax liabilities and maintain compliance with regulations. This article will provide long-term tips to help business owners lower their business tax liability with deductions. Knowing which deductions are available, how they are applied, and the impact they have on taxes can be a daunting task. However, understanding these deductions and taking advantage of them can save businesses a significant amount of money on taxes each year and even result in multiple years with a lower overall tax bill. Home Office Repairs, Alterations Your deductions for your home office don’t stop at the new laptop or computer desk. Repainting, re-flooring, and adding new or different lighting fixtures – all of these things are deductible if you are using the repaired or renovated part of your home for your work activities. When it comes to business expenses, many people overlook the things that seem “outside” the norm when it comes to tackling what is deductible and what isn’t. But remember – if you redid the flooring in your entire house and you only use 10% of its square footage for work, you can only deduct that amount, not the full renovation cost. It may even be beneficial to space out renovations in your business spaces over a few years if you’re able. This can help with tax planning and will lower your business tax liability for a longer amount of time. Research and Development R&D is a core component of your business. Whether you are testing new inks for a t-shirt printing business or creating new inventory software for your corporation, you have to do quality research and development to keep your business thriving and growing. These R&D tax credits (which were recently doubled via the Inflation Reduction Act) can reduce your tax liability dollar for dollar, up to …

Continue Reading about Lower Your Business Tax Liability: Did You Miss These 6 Deductions? →

Tips for Reducing Your 2023 Business Tax Bill

By

The upcoming tax season can be a daunting prospect for any business. With the 2023 business tax bill quickly approaching, it is essential to begin preparing now in order to maximize savings for your 2024 tax season. Planning ahead and understanding the implications of the Inflation Reduction Act will help. Fortunately, we’ve compiled some great tips for reducing your 2023 business tax bill (which will be paid during the 2024 tax season). Capitalize on the IRA The Inflation Reduction Act (IRA) was signed by President Joe Biden in August of 2022, and there are some big ways your business could use it to help reduce your federal income tax liability. According to a White House briefing, “the Inflation Reduction Act will reduce costs for small businesses by maintaining lower health care costs, supporting energy-saving investments, and bolstering supply chain resilience.” The IRA extended the American Rescue Plan’s premium tax credit for the Affordable Care Act (ACA) plans by extending them through 2025. Because of these lower healthcare costs, entrepreneurs will be able to use those available funds to help grow or start their small businesses. Small businesses will also receive a tax credit that covers 30% of the cost of switching to solar power solutions. This switch also helps lower long-term energy costs for SMB owners. And this energy efficiency can also mean a tax credit of up to $5 per square foot when these efforts deliver lower utility bills. SMBs can also see a 30% tax credit pertaining to the expenses of purchasing electric and fuel cell model vehicles – another short-term money saver that lowers expenses in the long term. On the personal side, you can upgrade your car by switching to an electric vehicle. Thanks to the IRA, you can receive up to $7,500 in tax credits for the purchase of a new electric vehicle. There are a few stipulations though: your new car must not have a price tag of more than $55,000 – if you’re buying an SUV, van, or …

Continue Reading about Tips for Reducing Your 2023 Business Tax Bill →

Best Practices to Make Your Business Payroll and Taxes Easier

By

Running a business is a complicated process, and the payroll and tax compliance tasks associated with it can be especially challenging. Fortunately, there are several best practices that business owners can use to make the payroll and tax processes easier and more efficient. With some planning and preparation, managing these tasks can be much simpler. In this article, we will discuss some of the best practices to make your business payroll and taxes easier while staying compliant with regulations. Payroll and Taxes: Key Components to Your Business Operations Aside from payroll as a necessity for your business continuity, there are several compliance and legal reasons to keep your payroll and taxes in order. And because your payroll affects your employee payroll tax as well as employer payroll tax and returns, you want to have things in order every time you run payroll, not just during tax prep season. This also helps keep you from missing quarterly tax payments for wages and other business items. There are several different types of payroll and payroll-related taxes, and we wanted to go through those here as we kick off this list of best practices. First and foremost, your business is responsible for preparing and filing Form W-2 for any and all wages, tips, and other compensation you’ve paid your employees in the last tax year. You’ll also need to withhold social security and Medicare taxes (including the 0.9% Additional Medicare Tax for wages and compensation that exceeds $200,000 in a calendar year) from those wages. It’s important to note that any freelancers or independent contractors you work with will not have these things withheld from the payments you send them – they are responsible for that withholding as they are self-employed. However, you will have to send them the correct 1099 forms (most often a 1099-NEC) so that any income you pay them totaling more than $600 can be reported. Then each contractor will pay the self-employment tax on …

Continue Reading about Best Practices to Make Your Business Payroll and Taxes Easier →

Recent Ballot Measures That May Affect Business Taxes

By

As a business owner, it is important to stay up to date on the latest ballot measures that could affect your taxes. Keeping informed of these measures can help you better prepare for future tax changes and maintain a healthy financial plan. Recent ballot measures that may affect business taxes have been proposed in various states across the country, so it is important to understand what might be in store for your business. Big Changes to Federal Business Income Taxes Some of the largest ballot measures and legislative changes that may affect business taxes stem from the 2022 Inflation Reduction Act (IRA) and the expiration of certain provisions in the 2017 Tax Cuts & Jobs Act (TCJA). The TCJA also allowed for full capital expensing for businesses from 2017 to 2022. On January 1st, 2023, that deduction was decreased by 20% and will continue to decrease gradually until 2027. Income tax brackets have been adjusted for inflation for the tax year 2023. For more information, check out our recent article on the topic. These changes are placing heavier burdens on businesses in the 2023 tax year. But, many state-level initiatives are being implemented as well. These things will aim to even things out and help businesses counteract their heavier federal tax responsibilities. State Changes That May Affect Business Taxes Before we start here, we want to make it clear that this article is not an exhaustive list of every state’s tax code changes for 2023, and we also want to remind taxpayers that there are likely to be more changes to your state’s tax code before the year is up. It’s important to stay up to date on current tax initiatives and legislation. You can do this by regularly checking the IRS website and your state government websites, or you can reach out to a trusted tax professional throughout the year. With that said, here are some of the biggest tax changes we’ve found that will affect certain states and businesses within them in …

Continue Reading about Recent Ballot Measures That May Affect Business Taxes →

4 Common Small Business Tax Mistakes

By

As a small business owner, it is essential to understand your tax obligations and stay on top of filing deadlines. Unfortunately, mistakes can happen, and it is wise to be aware of the most common issues that arise when filing taxes for your business. In this article, you will learn about the most common small business tax mistakes so you can take proactive steps to avoid them. Knowing what to look out for can help save you time and money when preparing your taxes. Procrastination With the tax season in full swing, it is important for small business owners to stay informed and up to date on their taxes. Unfortunately, many small business owners make common mistakes when filing their taxes that can be easily avoided. One of the most common business tax mistakes is procrastination. We know, there are very few people – especially business owners – who jump for joy once tax season hits. But it’s important to think about your tax season the same way you think about your business plans: even if you are living your dream of running a business you love, there will be things you don’t like doing. And you can’t put those things off until the last minute and expect the rest of your operations to run smoothly. The same is true with your taxes. In fact, when you file your taxes and your information returns early, you make it easier on yourself and the recipients of those forms to find new ways to make the most of this tax season. Not Verifying Vital Information This is one of the more obvious mistakes that so many of us make, and so few of us think we will make. It’s tedious, but a major mistake that millions of tax filers make every year is not verifying vital information on every single document page. You should always take the time to double-check that the correct name, Social Security Number, and date of birth are on your forms. The same is true for your business information, TIN, and related identifiers. The only thing worse than filing taxes is having …

Continue Reading about 4 Common Small Business Tax Mistakes →

Home Office Deductions for Tax Year 2022

By

In 2020, we shared the latest home office deductions information in regard to the shift to remote work caused by the pandemic. Two years later, we wanted to share an update to help you prepare for your 2022 taxes.  What has Changed Since 2020? Who qualifies for a home office deduction has not changed. Only self-employed individuals who work from a home office can take advantage of this deduction. How the deduction is calculated has been the same since 2013.  While this deduction hasn’t changed, it bears repeating how to take advantage of this deduction.  How to Calculate the Home Office Deduction According to the IRS, you have two options to calculate the deduction: the regular method and the simplified method. The Regular Method Using the regular method, you calculate the deduction by determining the percentage of the space that is dedicated solely to business use.  Direct business expenses are fully deductible. This includes updates made only to your home office, such as: Painting  Installing flooring Making repairs  Furniture Fixtures Indirect expenses can be partially deductible. This includes costs associated with your entire home: Property taxes Mortgage interest Rent Casualty losses Utilities Homeowner’s or renter’s Insurance Maintenance and repairs Depreciation The Simplified Method Using the simplified method, you can deduct a flat rate per square foot of the space dedicated to your business. For tax year 2022, that’s $5 per square foot with a maximum of 300 square feet or $1,500.  Remember: Your calculation must focus on the space dedicated to your business, not your entire home. How to Choose Your Deduction Method You can change your deduction method each year to maximize the deduction – and you don’t need a specific reason in order to do so.  It’s best to calculate using both methods and then choosing to use the method that will help you save the most money. Of course, this means …

Continue Reading about Home Office Deductions for Tax Year 2022 →