6 Smart Business Tax Moves to Make For 2015 Year-End

Tax Planning

tax planning

2015 is almost over but there are still some ways to make the best of your tax situation before New Year’s is here.  Spoiler-number 6 is the most important!

1. Do your 2015 bookkeeping now. If you aren’t current with your bookkeeping, now is a great time to catch up. You can’t know what your tax situation looks like if you don’t know what your income – or loss – is for the year.

2. Run bonus payroll. If your company is sitting on some cash consider running a bonus payroll. Didn’t make those quarterly estimated tax payments? Put all or part of the bonus to federal withholding to help catch up what you owe.

3. Set up a retirement plan. If you own a small business there are some easy ways to put away money for retirement. SEP and Simple IRAs make a lot of sense for micro and small business owners. There aren’t a lot of paperwork headaches or complicated filings required, and the contributions are tax deducible to the business. This is another good move if your company has some cash at the end of the year.

4. Buy equipment. On the fence about purchasing a computer or other office equipment? Take advantage of Section 179 and fully deduct big ticket items (aka fixed assets) in 2015, even if you only have them for a few days. Right now the deduction is limited to $25,000 but congress might change this.

5. Spend some money. Buy supplies and other business related items now for next year. Spend the money now and take the deduction now.

6. Find a fantastic CPA to work with. CPAs can do so much more than prepare tax returns! My firm offers a wide range of services such as bookkeeping, contract controller and CFO, financial modeling, and more. Take a look at my packages and services. Contact me for a free consultation!

Happy Holidays!

How to Fully Deduct Business Gifts

Usually business gift deductions are limited to $25

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Many business owners might not be aware of this, but gifts that your business gives out to vendors, customers, or other business associates are only tax deductible up to $25 per year, per recipient. This means that if you were thinking of passing out expensive bottles of wine (or tequila if you were thinking of sending your favorite CPA a gift! 😉 from your business, you would only be able to deduct $25 for each bottle on your tax return.

There are some exceptions to this $25 rule that will allow you to deduct the cost of gifts fully:

  • Any item that costs $4 or less and has the giver’s name imprinted on it – think pens, swag bags, etc.
  • Signs and promotional materials for the recipient to use on their business premises.

Tweet: Usually business gift deductions are limited to $25. Read more for exceptions: bit.ly/1qKWyc1 @BetteHochberger

Is Your Business Just a Hobby?

business hobby loss

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What’s the difference between a hobby and a business?  According to the IRS, it is whether or not you are trying to make a profit.  If you are not trying to make a profit and just want to write off the cost of your hobby, then you are subject to the “hobby loss rules.”

Business losses (when expenses are greater than income) can offset other income on your tax return. The general rule is that your business must make a profit in at least three out of the last five tax years. Otherwise, the IRS is allowed to re-characterize it as a hobby.  The reason this is a problem is because losses from hobbies can only be deducted up to the amount of income and only as a miscellaneous itemized deduction on Schedule A. This difference in treatment can significantly affect the amount of tax you pay.

The IRS provides this list to help you determine if you are in business or just enjoying your hobby:

  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Do you depend on income from the activity?
  • If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
  • Have you changed methods of operation to improve profitability?
  • Do you have the knowledge needed to carry on the activity as a successful business?
  • Have you made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Do you expect to make a profit in the future from the appreciation of assets used in the activity?

If you are not sure if your business is just a hobby contact me for an evaluation.

Tweet it! If your business has losses in at least three of the last five years, you have a hobby.  bit.ly/UmHnYb @BetteHochberger 

How to Deduct Your Vacation

plan carefully to make your vacation tax deductible

It is almost summer and many people will be thinking about traveling. If you plan it right you might even be able to deduct a good part of your trip.

Travel Primarily For Business

The IRS says that travel primarily for business is fully deductible. If you take a trip that is primarily for business and while you are there you extend your stay for a vacation or take a personal side trip you can still deduct the business related travel expenses. Personal trips are not deductible, but you can deduct any expenses while at your destination that directly relate to your business.

How do you figure out if a trip is primarily business or pleasure? Generally this is determined by the amount of time you spend on business vs. personal activities. If more time is spent on business activities your trip is primarily for business purposes.

Travel Expenses

There are a multitude of expenses that qualify as travel expenses. Transportation, hotel/lodging costs, car expenses (gas, oil, repairs, etc.), taxis, tips, and telecommunication fees are all examples of deductible expenses. Meals and entertainment expenses, however, are subject to a 50% limitation.

Keep in mind that if your spouse or children travel with you, only your portion of the travel expenses are deductible. Even if other family members occasionally assist you in business, unless their presence is necessary for you to conduct business, their travel will not be deductible.

Tweet it! Plan carefully to make part of your vacation tax deductible if the trip is primarily for business. bit.ly/1o3K8KR @BetteHochberger 

recite-deduct vacation

2013 Corporate Tax Return Deadline March 17, 2014

March 17 is the 2013 corporate tax filing deadline

The business tax return deadline is quickly coming!  Normally C- and S- corporation tax returns are due on March 15th, but this year that date is a Saturday so the kind folks at the IRS make the following Monday, March 17th the deadline instead.

At this point if you haven’t gotten your information to your CPA yet you are probably going to go on extension.  This is done by filing IRS Form 7004.   This gives you an extra 6 months- until September 15- to complete your tax return.  For C-corporations if you owe any tax for the 2013 year this form allows you make a payment for the balance due.

Tweet it! March 17 is the 2013 corporate tax filing deadline.  File Form 7004 to get an extension until September 15. @BetteHochberger 

recite-corporate filing deadline march 17 2014

For more tax dates check here.

Femfessionals Adds New Board Members and Community Ambassadors | South Florida Citybizlist

I am thrilled to be part of this fabulous group of professional women in Femfessionals Fort Lauderdale!

See the announcement in the CityBizList South Florida.

Femfessionals Adds New Board Members and Community Ambassadors | South Florida Citybizlist.

About Femfessionals and FemCity Ft. Lauderdale
Femfessionals connects ambitious professional women through “connection lunches,” original workshops, social media and www.femfessionals.com, creating individual communities within cities (FemCities) around the world. A Femfessional is a savvy business woman characterized as positive, open-minded, driven, professional, ambitious and desirous of forming strong strategic connections to benefit each other personally and professionally, and to the benefit of her community. Not only is she motivated to succeed, she is passionate about the success of others around her. For more information about Femfessionals, visit www.femfessionals.com For more information about FemCity Ft. Lauderdale, visit www.facebook.com/FemCityFtLaudy or @LauderFEMS on Twitter. – See more at: http://southflorida.citybizlist.com/article/femfessionals-adds-new-board-members-and-community-ambassadors#sthash.hLW2RzZB.dpuf