When you begin your tax preparations prior to filing your forms with the government, there are a number of important steps which you should include in order to make the process go as smoothly as possible. Everyone understands that all the necessary forms need to be gathered and organized, and that an appointment with your accountant will be necessary. Here are three of the most often overlooked factors which many small businesses should be taking advantage of, but forget to do so, either out of ignorance or oversight.
Maintain an accurate mileage log
Many small business owners fail to maintain an accurate mileage log, and in doing so, cost themselves significant amounts of money in deductions. Of course you should start by using the current standard mileage rate, but that’s only the first step. You also need to track all the mileage generated when you use your vehicle for business purposes throughout the calendar year. The best way to accomplish this is to use one of the many available mobile apps, which allow you to record business mileage faithfully right on your smartphone.
Log all out-of-pocket expenses
Business expenses which are recorded using company accounts are all very clear and trackable, but there may be other expenses which you may have paid through personal accounts or with personal cash that’s not so obvious. Part of your tax preparation should be to get into the mindset of being aware of any expenses which you incur and pay for from personal resources, because these should be recorded as business expenses which can be deducted.
Log meal expenses accurately
Any meal expenses which you have with clients and customers are only 50% deductible. However, meals which you purchase when you are making business trips could very well be 100% deductible. There are other situations which also allow for 100% deductible meal expenses, such as when you order fast food for a group of employees who are working after-hours to complete a project. The important point here is that your tax preparation should include logging meal expenses accurately, because you may otherwise be cheating yourself out of additional deductible amounts.
Tax time and Skybridge Capital Group
If your should find yourself in a situation where you lack the funding to pay for any taxes owed the government, we may be able to help you overcome the shortfall. Contact us at Skybridge Capital Group, and let our financial specialists work with you to explore ways of obtaining the funding you need to remain in good standing with your taxes.