Categories: Tax Advice

Business and Tax Savings Tips

As business owners prepare for tax season, many sole proprietorships begin to consider the tax benefits of incorporating or forming an LLC. Similarly, business that are incorporated are looking to maximize their tax savings – especially during this tough economy.

The IRS states that any “ordinary and necessary” business expenses can be subtracted from your business income prior to being to taxed. Here’s the interesting part: Your business does not even have to make a profit for your expenses to be deductible. You must only establish a “profit motive.” Under the Internal Revenue Code, a “profit motive” is presumed if you earn any net income in any three out of five business years. Furthermore, the general rule is that as long as the expense is made for business (not personal) purposes, you can deduct it from your business income.

Business tax deductions you should consider include the following:

Auto expenses
Expenses of going into business
Education expenses related to business or trade
Legal & professional fees
Business entertaining & travel
New equipment & software

To ensure that you don’t miss large deductions that could save you a great deal of money, it is wise to consult with an income tax professional.

So make what many consider to be a difficult time of year into a painless …here’s to tax season!

Tax Time Tips

As tax time is right around the corner, here are some things to remember:

Be sure to gather all the necessary documents/info to file both personal and business taxes
File any required quarterly taxes
Decide whether or not to elect S-Corporation status for 2010 (the deadline is March 15th)
File all required annual reports with the Secretary of State.

Deborah Sweeney

Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration. Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law. Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others. Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.