Home » Aron Govil-Small Business Tax Planning Checklist

Aron Govil-Small Business Tax Planning Checklist

Aron Govil says as a small business owner, you have a lot on your plate. Between staffing, marketing, and keeping your business running smoothly, it can be hard to find the time to think about your taxes. But putting together a tax plan is essential to minimizing your tax bill and keeping your business in compliance with the law.

The good news is that you don’t have to do it all alone. This small business tax planning checklist will help you get started.

1. Make sure you are organized.

The IRS requires you to keep records of your income and expenses for at least three years. Make sure you have a system in place for tracking your finances so you can easily pull the information when it’s time to file your return.

2. Know what deductions are available to you.

There are a number of deductions available to small businesses, including:

  • the home office deduction
  • the vehicle deduction
  • the self-employment tax deduction
  • the retirement plan contribution deduction
  • the health insurance deduction
  • the education expense deduction

Be sure to research which deductions are available to you and make sure you take advantage of as many as possible.

3. Make quarterly estimated payments.

If you expect to owe $1,000 or more in taxes for the year, you will need to make quarterly estimated payments. This will help you avoid any penalties or interest charges that may be assessed if you wait until the last minute to pay your taxes.

4. Stay up-to-date on tax changes.

The tax laws are constantly changing, so it’s important to stay up-to-date on the latest changes. The IRS offers a variety of resources to help business owners, including the Business Owner’s Toolkit and the Tax Reform Resources for Businesses page.

5. Consult with a tax professional.

If you’re not sure how to approach your small business tax planning, it’s always best to consult with a tax professional. They can help you identify potential deductions and make sure you’re taking advantage of all the tax breaks available to you.

By following this small business tax planning checklist, you can take some of the stress out of tax season and ensure that your business is in compliance with the law.

Now that we have covered the basics of small business tax planning, let us take a look into the different ways a small business can save money on their taxes.

Aron Govil-The following are three common ways small businesses reduce their tax liability:

1. Business Deductions

2. Write-offs for Equipment Purchases

3. Self-Employment Taxes

Business Deductions:

There are many business deductions that can be taken advantage of in order to reduce taxable income. Some of these deductions include the cost of doing business such as advertising, office supplies, and travel expenses. In addition, there is also a deduction for the use of a home office space. The percentage of the home used for business purposes is deductible from rent or mortgage interest, utilities, insurance, and other related expenses.

Write-offs for Equipment Purchases:

Another way a small business can reduce its tax liability is by writing off the cost of any equipment purchases. This includes office equipment, computers, and vehicles used for business purposes. The purchase price can be deducted in full in the year the equipment is purchased.

Self-Employment Taxes:

Small businesses that are considered self-employed are responsible for paying their own Social Security and Medicare taxes. This amounts to 15.3% of net income. However, there is a deduction available for half of this amount. In addition, there is also a deduction for contributions to retirement plans. The total contribution cannot exceed $53,000 for 2018. By taking advantage of all the deductions available to them, a self-employed business can reduce their tax liability significantly.

Now that we have looked at some of the most common ways small businesses reduce their tax liability, let us take a more in-depth look at each of these methods.

Conclusion:

Aron Govil believes the goal of small business tax planning is to reduce the amount of taxes owed as much as possible. There are a number of deductions available to business owners, and by taking advantage of these deductions, businesses can reduce their taxable income. In addition, self-employed businesses can take advantage of special tax deductions and contributions to retirement plans. By following this small business tax planning checklist, business owners can take some of the stress out of tax season and ensure that they are in compliance with the law.

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