| Paying taxes is unavoidable. However, minimizing tax | | | | This can be later deducted as a travel expense at the |
| liability is your choice. By taking advantage of the many | | | | prevailing rates. |
| tax deduction options available for small business | | | | Health insurance is another expense that qualifies for |
| owners, you can significantly reduce your tax burden. | | | | tax deduction. If you are the sole proprietor, health |
| Knowing a few home business tax tips will help you | | | | insurance premiums for yourself are tax deductible, |
| save some of your hard-earned money. | | | | whereas if you have employees, premiums paid by |
| Record keeping: Small business owners often ignore | | | | you for their health insurance also become eligible for |
| keeping an organized record of all business-related | | | | deduction. A small business owner can indirectly save |
| expenses incurred throughout the year. This is | | | | on taxes by employing their family members, as they |
| essential to make use of tax deductions on expenses | | | | pay less tax on their income and you can keep the |
| related to running your business. | | | | money in the family itself. |
| In the event of an audit by IRS, only deductions that | | | | Pay tax on time: An important tax tip for a small |
| can be backed up by relevant documents are | | | | business owner is to pay tax on time rather than |
| accepted. Ensure that you save all the receipts and | | | | putting it off. Avoidance of tax payment will result in |
| bills for a period of at least seven years. Also, it is | | | | paying the entire tax amount plus interest and fine on |
| prudent not to mix personal and business expenditures | | | | that amount. |
| when you run a home business. | | | | As a home business owner, you are required to pay |
| Know your deductions: If you run a home business, | | | | taxes quarterly. An estimated amount has to be paid |
| you can deduct certain costs associated with the | | | | every three months, failing of which will attract penalty. |
| maintenance of your home from your taxes. However, | | | | When you file your returns at the end of the year, pay |
| only the maintenance costs for the specific area that | | | | up any deficiency, if you have paid less, or get a |
| is used as home office is eligible for legal deduction. | | | | refund, if you have paid more. |
| Some of the expenses that qualify for this deduction | | | | File your returns: Paying tax is not enough to avoid |
| include mortgage/rent payments, property tax | | | | coming under the radar of IRS. You have to file your |
| payments, utility bills, and home insurance premiums. | | | | returns for the previous year by April 15. In case you |
| Additionally, a small business owner can deduct any | | | | are not ready with the necessary paper work, you |
| cost related to the business from the tax. This covers | | | | can get a six-month extension by submitting Form |
| a whole gamut of expenses from equipment purchase | | | | 4868. This is only an extension to file returns. Tax dues |
| and maintenance to telephone and fuel bills to | | | | have to be paid by April 15. |
| advertisement and entertainment expenses. | | | | Tax laws keep changing every year, bringing in new |
| Small business owners can claim deductions on the | | | | deductions and making some older ones obsolete. |
| costs of purchase and maintenance of computers, | | | | While a small business owner is advised to keep |
| domain name registration and hosting, software, | | | | up-to-date with tax laws, services of a professional |
| internet service, magazine subscriptions, and office | | | | tax preparer can be utilized for exact calculation of |
| supplies, provided these are exclusively used for your | | | | taxes and preparation of returns. The cost of such |
| business. You can keep a log of your mileage when | | | | services will be recovered from the money you save |
| you use your car for business travel, even if it is for | | | | by paying less tax. |
| visiting a post office or library for business purposes. | | | | |