The end of 2017 marks the end of the fiscal year for most businesses, which can be the most wonderful time of the year! No, not the holidays. It’s tax time! We know tax season can seem intimidating and daunting, so here are some quick tips to get your business ready for a visit with the accountant.
The number one reason people dread tax time is because they aren’t prepared for it. Even if you start taking a few hours a week now before the end of the year to get organized, you will have a much better experience preparing your taxes. Start by sorting paperwork and putting them into inexpensive folders or envelopes. Label important documents so you can easily find them when it’s time to do your taxes. While gathering these invoices and receipts, take time to reconcile your bank accounts to make sure everything matches up. The IRS has generated a handy checklist of things you need to prepare your taxes here.
Business Tax Deductions
The cost of running your business is what is called your business expenses. A business expense is considered to be tax deductible if it is ordinary and necessary. The IRS defines ordinary expense as one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.
Two common businesses deductions are home office and auto deductions. If you use your home for your business, you may be able to deduct a portion of your mortgage interest, utilities or insurance. Visit the IRS’s website to see if you meet the requirements.
For your car, you can deduct expenses in one of two ways. You can either deduct the standard mileage rate (total miles driven multiplied by the standard rate for the year), or you can deduct actual car expenses like gas, insurance or repairs. For more information about these options visit the IRS HERE.
Put Bartercard to Work for You
The IRS recognizes 1 Trade Dollar is equal to 1 USD, so transactions would be reported as income/expenses depending on how they are used. But, did you know you may be eligible to claim a charitable deduction on your tax return? We have a number of non-profits in our trade network that would be grateful for trade dollar donations. If you would like to make a donation please contact your Trade Broker for assistance.
Additionally, it is always recommended that when a Bartercard member is considering making a donation of Trade Dollars to a charity that you consult your tax advisor or accountant to discuss the particulars of the gift, and determine how much of the gift may be deductible for tax purposes.
Plan ahead and remember this is general advice only – please seek specific advice for your own circumstances from your own professional tax advisor and the IRS.
Article written by, and shared with permission of Bartercard Buffalo.