Last Minute Tax Tips - Hurry!
Whether you’ve finished your tax return, or have yet to begin, the search for credits and deductions doesn’t stop until April 15th. Karen Stern, partner in charge of BSW Small Business Services, discusses timely tax tips to alleviate some stress in this month’s “Financial Fitness,” as featured in Small Business Monthly.
Does your calendar have an ominous red circle around April 15? The final scramble to complete tax returns has begun, so here are some last-minute tips for you to keep in mind.
Have you included all of your deductions? It’s surprising how many small-business owners fail to take all the deductions they are allowed. Educational expenses, vehicle mileage, home office and health insurance costs all may be deductible. Just ensure you have supporting documentation to substantiate them.
Take credits. There may be special tax credits – such as health care tax credits, tax credits for hiring a qualified, unemployed veteran in 2013; and research and development tax credits – that apply to your business. The best approach is to run these by your CPA.
Roth IRA contributions in 2013 or 2014. While a Roth IRA contribution may help you down the road as a tax-free withdrawal (if you’re eligible), the contribution isn’t deductible for the year you made it. If you need the deduction that a regular IRA contribution provides, you can turn your Roth IRA contribution into a traditional IRA contribution. There are specific rules regarding this, so make sure you consult a tax expert.
Most important, pay yourself. If you don’t have a retirement plan, establish one. Whether it is an IRA, profit-sharing plan, 401(k) or traditional pension plan, the earnings are tax-deferred and the contributions are deductible. You may also be eligible for a tax credit on your federal income tax for contributions. By doing this, you’ll be saving money for retirement and saving taxes.