According to Topic No. 514 of the Internal Revenue Service, employees are allowed to deduct particular expenses related to work. You could log these expenses and ask your workers to deduct them when filing returns. This will give employees a bonus and it might lower the amount of income tax payable.
Nowadays, small business websites are a means for receiving donations and raising funds for charitable causes. One area of concern is if the money raised is taxable. If you’re not aware of what is exempt from taxation, make sure you consult with a qualified tax expert before making a decision.
Aside from the incomes, you also need to keep track of receipts. Certain business expenses reduce the amount of taxable income but you need proof to take advantage of these deductions so keep all your receipts. Besides, in the event your business is audited, the receipts can serve as proof of the expenses. Some businesses that sell online are even using plug-ins on their small business websites so they can track expenditures.
A business that files their taxes at the last minute is at risk of paying a penalty. Late payments usually lead to penalties which essentially increase how much you pay in taxes. Businesses that stay organized throughout the year and get the required documents together early often pay on time. Many businesses also use tax preparation software to speed up the filing process and that helps keep everything accurate.
- December 1969 (4)