Tax season can be a very scary time for many Americans, particularly those who own and run their ownbusinesses. With the warm weather of spring come tax deadlines and the negative presence of having to prepare your taxes. But with the right information, filing taxes for your online business can be simple and easy whether you do it yourself or hire your own personal accountant. The following tips will help you to be better prepared to file your taxes come springtime.
Staying organized starts at the beginning of each new year. When you keep your financial documents organized and in the same place, they are easy to find once it’s time to fill out your taxes. Create labeled folders and storage places for each document you get throughout the year that relates to your taxes. Keeping your information organized also ensures that you don’t miss any important deductions that can save you money.
Deduct Your Home Office
For the small business owner that has a home office, a tax deduction is available if your office room is only used for your business. With the right documentation, you can deduct a portion of your home expenses as a business expense. Remember that your home office must be your primary business area, and you cannot rent space elsewhere to conduct business. Additional info can be found here on how to qualify.
Don't Forget About Travel
What's often overlooked are travelling expenses, including airline fees, ground transportation, hotel stays and dining expenses. What about combining business and pleasure? It is okay, as long as business is the main purpose of travel. However, if you take your family along, you can deduct only your business expenses.
Remember Website Expenses
When you run an online business, you spend a lot of time and money maintaining your website, and many small business owners forget that those expenses can be deducted from their taxes. Expenses for domain name, software, and web hosting are all eligible as deductions off your total tax bill. You can also deduct any payment you made to have your website designed and created.
If your business sells goods through websites such as Amazon, eBay or Etsy, you have probably processed payments through these sites. You should receive a special form that reports any money that was processed through these sites that was considered income for your business. Visit the IRS website for more 1099K instructions if you aren’t sure where to include this information in your taxes.
Deduct Training And Education Costs
If you attend any seminars or classes throughout the year that pertain to your business, costs associated with these can be deducted from your tax bill. Any books, newspapers, and other publications that are purchased for your business can also be used as a deduction.
Lowering your tax bill involves staying up to date on all new deductions and making sure that you are taking advantage of all deductions you are eligible for. As a small business owner, make learning about small business tax deductions a priority every year.
About the author: Evan Aoki is a feature contributor for Theprointern.com where he likes to report on subjects where life meets money.