With complicated and constantly changing tax laws, it can be easy for businesses to overlook tax-saving opportunities. Fortunately, by engaging a tax expert like Whyte & Associates, Inc., we can help you keep up with the latest deductions, credits, and exemptions to reduce your tax burden.
Most businesses overpay taxes or wrongly claim deductions, which can result in non-compliance penalties. Since most companies operate on a thin budget, you can only afford necessary taxes, fines, or penalties. We’ll explain common tax deductions overlooked by taxpayers. Hopefully, you’re eligible for some of these tax breaks to reduce your tax burden this year.
If you want to lower your tax burden, tax deductions are a great option. Tax deductions are expenses you subtract from your revenue to minimize tax liability. However, these expenses must have been used for trade or business. Examples of tax deductions include advertisement costs, payroll, utilities, travel, legal and professional fees, etc.
Any expense doesn’t qualify as a tax deduction. You can’t use private expenses to reduce your tax burden. For instance, education fees for your children and holiday expenses can’t be used as a tax deduction. These personal expenses were in no way used to generate business revenue.
Pro-tip: You must keep a record of all the business expenses to prove they are legit. This means you maintain your receipts, contracts, and other support documentation. This requirement means your bookkeeping must be on top. However, if you’re struggling with bookkeeping, don’t hesitate to contact us.
When you fail to record all your legal tax deductions, you pay more taxes, which isn’t good news for your liquidity. Keep your eyes peeled for the below tax deductions that most businesses ignore.
These are just examples of tax deductions not taken advantage of by most businesses. However, we usually find more when analyzing your individual case. For instance, many taxpayers typically file their returns without considering credits and exemptions that reduce tax liability. In some cases, we’ve seen taxpayers treat tax refunds as income! Don’t pay more taxes than you should. Instead, engage a professional firm for tax planning. We’ll educate you on deductions applicable to your business and other areas you can take advantage of to minimize your tax burden.
Taking advantage of tax deductions isn’t just a priority at tax time; it should be done throughout the year as your business operations run. Please engage Whyte & Associates, Inc. in Rancho Cucamonga, CA, for proactive tax management. Tax planning helps individuals and businesses reduce the tax burden while conforming to legal requirements. Call us at (909) 575-0080 to partner with our team today!