Now that your business is in full swing for 2011, it’s time to start preparing to pay your final tax filings for 2010. Here are four helpful tips that can easily save you time and money on preparing for your taxes.
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Review your accounting system
Do you save receipts in a shoe box? Or do you have a more sophisticated method of keeping your accounting books? Even if you use accounting software for your small business, it may behoove you to review and make a change.
Some of the more popular business software packages like Quick Books or Peachtree help you along the way when you enter transactions. It will ask if a particular transaction is tax deductible. That way, all you have to do at the end of the year is run a report to show all your tax deductions in various categories.
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Don’t forget charitable contributions
Did you give money or donate products or services to a charitable or non-profit corporation? Even if you donated just parking space to a non-profit, you can get fair value for your contribution.
Be sure that the non-profit you work with provides you with a charitable donation tax receipt. In addition, be sure to claim every little donation or contribution you made during the year.
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Deduct your maximum mileage
All the miles you drive on your company vehicles or even private vehicles for business purposes should be used for the maximum tax deduction. Remember that the IRS sets the standard business mileage rate, and due to higher fuel prices, the deduction amount has been steadily increasing. For 2010, the standard mileage rate is $0.50 per mile.
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Deduct your equipment purchases
Don’t overlook the special incentive tax deduction passed through the stimulus bill. You can still deduct your equipment purchases, including computers, vehicles, and heavy machinery, as fully depreciated for the year. This can save you considerable tax dollars for your new capital purchases.
