2013 mid-year tax planning tips for small businesses

By Bert Seither, Director of Operations at Corporate Tax Network

About the author: Bert Seither is the Director of Operations at Corporate Tax Network, a national accounting and business development firm. For nearly 10 years, Seither has assisted small business owners to help put their companies on a path to prosperity.

Even though April 15, 2014 may seem like a date that is not very relevant at this point in time, it should be noted on your calendar for tax planning purposes. Plus, when it comes to small businesses, there are tax-related dates throughout the year to keep in mind. Planning ahead for tax season can never start soon enough. Corporate Tax Network offers a few tips on planning for the remainder of 2013 and into 2014 so that you’re prepared:

-- Educate yourself on the tax-saving opportunities you can take advantage of to reduce your tax bill.
Although the IRS is often looked at negatively, the agency does in fact give both individuals and small business owners chances to reduce their tax liabilities. This is why you should make an effort to educate yourself about the various types of tax deductions, exemptions, and credits you may be able to claim on your tax return. You can do some research on your own, or consider teaming up with an accounting professional to ensure you take full advantage of every possible tax-saving opportunity.

-- Keep in mind how the “fiscal cliff” deal and sequester may have impacted your tax situation.
The “fiscal cliff” package passed by Congress and the federal government’s sequester cuts that went into place earlier in 2013 are often easy to forget about. However, they are and will continue to affect American taxpayers in different ways. One example is the new tax bracket of 39.6%. Single filers who earn at least $400,000 in yearly income or married couples bringing in $450,000 annually are now part of this higher tax bracket. Additionally, government workers impacted by the sequester cuts are already experiencing reductions in their income from forced furlough days. There is a chance these income reductions could play a role in the amount you claim on your income tax return next year.

-- Learn about the new home office deduction option.
In January 2013, the IRS introduced an alternative deduction option for taxpayers who claim home office expenses related to conducting business. Rather than having to deal with complex calculations to determine your deductible amount, the IRS now offers a simplified deduction option. You can claim $5 per square foot of home office space for up to 300 total square feet. The maximum deduction amount is $1,500 when taking this route. To avoid potential tax problems when claiming this deduction, you should only include expenses that are incurred exclusively for business purposes.

-- Be aware of the changing Internet sales tax landscape.
There continues to be lots of debate on Capitol Hill about the implementation of a federal Internet sales tax for companies that generate sales online. While much of this is still in the discussion phase, keep your eyes open for possible decisions that could be made and go into effect by the end of 2013 or into 2014 that could significantly affect your tax standing as a small business owner with an online presence.

-- Organize your records and business receipts.
Before tax season is officially here, now is the time to get all of your tax-related documents, business receipts, and other relevant items organized for tax planning reasons to make sure that you aren’t in a nervous frenzy when tax season rolls around. Take a good look at your recordkeeping process and materials to ensure everything is in order and is easily accessible. Organize any receipts you’ve been saving up all year that could help you claim deductions on business expenses. Be sure to save any additional receipts you get throughout the rest of the year and moving forward. Filing your taxes can be a whole lot simpler when you’re totally prepared for your tax-filing deadlines.

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