Accountants and tax preparation professionals are an important asset to your financial team. They ensure that your returns are completed accurately and filed on-time. However, during the busy tax season, they are limited in how much time they can spend exploring less common tax deductions and credits. This is where your Certified Tax Coach comes in. With the help of these specialists, you can identify uncommon methods of decreasing your tax liability. Our new release, The Great Tax Escape, offers details on the tax savings you could be missing.
Deductible Business Expenses That Are Often Overlooked
Your accountant is sure to recommend that you take deductions for basic expenses like utilities and equipment purchases. However, there are other opportunities to secure tax savings on some of the costs of doing business. These are just a few of the deductions that many business owners fail to claim:
The Benefits of Building a Family Business
Working with relatives can present its own set of challenges, but there is no question that employing family members leads to significant tax savings. By hiring your dependents, you may be able to cut costs on Social Security, Medicare, and unemployment taxes, and hiring your spouse increases opportunities to save through retirement programs.
The primary point to keep in mind when bringing parents, children, or spouses on-board is that there is no room for fudging the numbers or exaggerating job responsibilities. You can expect the IRS to validate that children are in age-appropriate positions with suitable duties based on their level of education and experience. Keep careful records when you employ relatives, so you can easily demonstrate that they are legitimate employees.
Employee Engagement Expenses
When your staff members love coming to work, their productivity increases, and there is a proven connection between employee engagement and profitability. Many small business owners encourage a positive culture through special recognition events and activities. Sometimes, they even use personal funds to present workers with a gift or reward for birthdays, service anniversaries, and similar.
Tax regulations make it possible to deduct some of the expenses related to reward and recognition. For example, you can deduct service anniversary gifts up to a specified amount once every five years for each employee. Such deductions often go unreported and the tax savings are forfeited, because this opportunity is not well-known.