Doing your own taxes can be fraught with uncertainty, especially when it comes to preparing the taxes for your own business. Understanding what is a deduction and what isn’t can be confusing and it’s easy to miss out on benefits and pay more than you need. This is one of the main reasons people turn to a CPA firm in San Antonio TX such as Gonzales Group. We’re here to help you make the most of any available tax deductions.
Unlike personal taxes, there are no Standardized Deductions available for businesses, so it’s important to understand what a deduction is. A tax deduction reduces your business’ tax liability by lowering your taxable income. Your tax liability is the amount of money you owe the government before counting any credits or deductions. Deductions reduce your taxable income, while credits reduce the direct amount of tax you will owe.
A deduction is much like a coupon, in that it reduces the amount of money you must pay taxes on in each fiscal year. For a business, deductions are the expenses that can be subtracted from your gross income before your taxable income is calculated. The lower your taxable income, the less you pay in final taxes.
For businesses, most expenses related to the cost of running your business can be deducted. They must be itemized, though. There are also state and industry rules to be aware of regarding what can be deducted, which is why having a CPA prepare your taxes is such a financially sound plan.
Among the common business deductions are supplies, office space, employee salaries, software, mileage, maintenance, and travel expenses. The forms you will need are 1065, 1120, or 1120S. Because there are no standard deductions, it’s imperative that you keep a record of all of your expenses and are aware of the requirements of what can be counted as a deduction and what cannot. While office space is considered a deduction, if you work from home, there are certain requirements your home office must meet to be deductible. Also, depending on your type of business, you may qualify for the Qualified Business Income Deduction, which is for sole proprietorships, partnerships, and C Corporations.
Within the categories for deductions there can be varying rules, so your best bet is to keep meticulous records and receipts of all of your purchases and expenses and turn to the help of an experienced CPA firm in San Antonio TX like the Gonzales Group. We work with a variety of businesses to prepare your taxes and handle additional business finances. Contact us today to learn how we can help you find more tax deductions and save you and your business more money.Tags: cpa firm in san antonio tx, IRS Accountants San Antonio
This post was written by Gonzales Group CPA