As a small business owner, the idea of tax planning may seem overwhelming and can sometimes even get ignored. But if you’re able to put into practice some good tax planning habits and even meet with a tax advisor quarterly, you’ll find that you can take advantage of provisions, credits, and deductions that may considerably reduce your taxes. Below are just a few items to think about as we near the close of 2015.
If you aren’t already doing so, you may be able to take advantage of the Section 179 deduction. This allows businesses to deduct the full purchase price of qualifying equipment and/or software that is purchased and put into service by this December 31, 2015. All businesses should qualify for this deduction if they purchase, finance, and/or lease less than $200,000 in new or used business equipment during tax year 2015. The deduction limit in 2015 is $25,000. For a qualifying list of equipment, click here
Additional deductions to consider for your business might be auto-related. For instance, the standard mileage rate (used to calculate the deductible costs of operating an automobile) for business miles driven in 2015 is 57.5 cents per mile. Taxpayers also have the option of claiming deductions based on the actual costs of using a vehicle instead of standard mileage rates. You can deduct car expenses (such as repairs, gas, parking, tolls, etc.) if you use your car for business as well. Keep in mind that if your vehicle is used for business and personal purposes, expenses must be divided based on mileage. Don’t forget to keep track of business travel, too. Items like airfare, meals, lodging, taxis, and more can all be deducted.
Whether you already have a tax plan in place or you’re worried about where to start, it never hurts to have a second set of eyes review your plan to ensure your business receives the most benefit. FORUM Credit Union offers a wide range of advisory and business consulting services including tax planning and preparation. For more information, contact FORUM Private Client Group at 317.558.6322 or firstname.lastname@example.org.
The above is not intended to be tax advice, was not written by a tax professional and is informational only. Please consult a tax advisor for your specific situation.
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Categories: Business, Finances, Taxes