Atlanta, GA -- (ReleaseWire) -- 04/04/2014 -- Filing taxes as a solo business owner can be more complicated. Home-based businesses that hold up until the last minute to prepare taxes could be losing in the long run. Solopreneurs need to be aware and well-equipped with proper tax strategies.
Meisa Bonelli, a Wall Street finance and tax professional, business match-maker, and mentor, pointed out, “many small and home-based business owners, solopreneurs and startup owners are serial 'late filers' and miss out on maximizing tax benefits that are unique to their type of business structure.” She said those who are not tactically planning and preparing their taxes well annually could miss some potential savings.
Furthermore, Bonelli offered seven tax-saving tactics which solopreneurs, startups and home-based business owners should be aware of.
1. Pick the right entity for the business.
Business owners should register the business under the entity type which best matches the business goals. According to the Global Entrepreneur Monitor report, 69 percent of American startups are home-based businesses. In addition, 59 percent of established enterprises that are more than three and a half years old still run as home-based businesses. They should also confer with a tax consultant or an attorney to determine which business entity is suitable.
2. Audit proof the enterprise.
This does not only mean saving the receipts of a business. It is important for business owners to keep a file of calendars, mileage and personal use logs, depending on the kind of home-based business they operate. Since home-based businesses are not the same, it is crucial for business owners to discuss these matters with a tax professional to ensure better tax compliance.
3. Consult a home-based business tax professional.
Home-based company owners should seek the help of a tax professional. They have the expertise to assist the owners in the complexities of their particular types of businesses. This could help business owners save money from missed deductions; and time in learning applicable Internal Revenue Service (IRS) regulations on their own. Accounting software usage can be limited and can only as good as the person who uses it.
4. Get a second look.
Business owners should make sure they do not miss a deduction. Almost a quarter of a million individual business returns not claiming the Earned Income Tax Credit were examined by the IRS and assessed additional taxes to pay after review in 2012. This excludes farm returns. Several tax professionals provide complimentary consultations regarding their services. They can also take a look at the business’ previous year’s returns.
5. Tax planning is year-round.
A seasonal business may require just a simple tax situation. In this matter, it is alright for business proprietors to check taxes once a year if not much has changed in a year. However, if the business is not seasonal, the proprietor will need a year-round tax plan, strategy and procedures. In most cases, the business owner will find it convenient to consult an expert, since the tax indications of a business’ decisions are an year-round issue.
6. Start a retirement plan.
The government makes it beneficial for home-based business owners and solopreneurs to put something aside for retirement. Business owners should take full advantage of a retirement plan which suits them and their long-term goals. Those who are just starting out a business may also find it wise to plan for the future – this is considered a one of the best savings strategies.
7. Have integrity.
Tax fines and penalties for not running a home-based business properly are rigid. Solopreneurs and home-based business owners should look for the information which will be valuable in operating a successful business. They should also consistently follow proper business rules and regulations.
About Interstate Tax Strategies
Interstate Tax Strategies is a consulting company based in Atlanta that assists clients by developing technically sound, business specific, and cost effective interstate sales tax consulting solutions.