Guest Blog: Tax Tips by Accountfully
Feb 6, 2018
About guest blogger, Accountfully: Accountfully is an outsourced accounting firm that works with modern brands and businesses. We do more than the day-to-day work of professional accountants and bookkeepers. We also serve as a long-term strategic partner to help our clients navigate complex financial challenges and opportunities.
We’re a fully outsourced accounting team, which for clients means we’re their bookkeepers, accountants, CFOs, controllers, and CPAs. Fluent in the inner workings of their businesses, we are also a trusted advisor—a resource when it comes time to make big decisions.
Happy tax season LLF member businesses! For many of you, this time of year can prove to be stressful and confusing. And we get it— you’re a business owner, not an accountant! To help you get through tax season with confidence, we’ve put together a few tips and tricks you might find helpful as you begin thinking about the filing process.
If you are filing as an S-Corp, a tax classification that many business owners find beneficial, here are three ways to adjust your 2017 net income: (By adjusting net income, you are improving and potentially reducing your tax liability.)
- Maximize IRA Contributions: Did you know that you can still contribute to your personal and employees’ IRA accounts up until the date you file taxes? This nontaxable contribution is an easy way to increase your employees’ compensation packages without triggering additional payroll or income taxes.
- Deduct Your Vehicle: Good news if you purchased or leased a work vehicle – Using section 179 and bonus depreciation for 2017, you can deduct up to $11,160 for qualifying vehicles purchased or financed during the tax year.
- Deduct Health Insurance: Shareholders in an S Corporation can deduct health insurance premiums for themselves, spouses, and dependent children on page 1 of their 1040.
… And don’t forget, if you’re filing as an S-Corp, your returns are due on March 15th.
If you are filing as a sole proprietor/self-employed, here are three things you can do to improve your tax position:
- Deduct Health Insurance: Be sure to deduct the health insurance premiums from everyone in your family. You can deduct your own, your spouse’s, and your children’s when it comes time to file.
- Maximize Your Home Insurance Premiums: For state taxes, did you know that if your homeowners’ insurance premiums are more than five percent of your adjusted gross income, you can get a dollar for dollar credit? This maxes out at $1,250 but is a great way to take advantage of costly unavoidable policies.
- Make sure you aren’t paying 7% of your business income to South Carolina! With the Active Trade or Business Income Deduction, taxpayers only pay 3% on their business income.
… And don’t forget, if you’re filing as a sole proprietor, your returns are due on April 17th.
And finally, it’s important to remember that tax strategy is a year-round responsibility. Most businesses make quarterly tax payments, withhold taxes from employee paychecks each month and charge taxes on goods or services. As you can see, taxes are a part of every day, week, and month, so it’s best that you keep a regular eye on it.
To make sure you’re being proactive with your taxes, work with a team that will help you implement a regular review process. For professional services businesses that don’t maintain inventory, quarterly check-ins are usually fine. Retailers and suppliers might opt for monthly or more frequent check-ins depending on the goods they sell or the complexities of their business. Consider the interval that works for you and protect time to meet with your accounting team in an ongoing manner. If you would like to learn more about taxes visit our resource center to download our tax guide. And lastly, if you’re struggling and need a little advice, let us know. We’re here to help!