Let us take care of the financial details so you can focus on your business.
Starting and running a small business can be very challenging, yet very exciting. Most business owners start a company to do something they love. That passion can be a great motivator, but it can also be a distraction. Proper tax preparation and recordkeeping of your small business tax deductions is a must.
From sole proprietors, to partnerships and corporations, we are able to file any type of business return in a timely manner.
There are several tax deductions available to small business owners. The obvious ones like printer paper and business cards are easy. But what about cell phones? What is the business use of a shared family plan? How about home offices? Meals and Entertainment-?
Self-employed health insurance and Health Savings Accounts (HSAs) can be tricky, and many small business owners leave money on the table by deducting these improperly.
These are the type of things Jerod Ostermeier CPA, CFP® will consult with you. Often times the taxpayer or small business owner gets in trouble because he or she did not understand the rules. Once you know the rules and how to apply the rules, owners can take advantage of small business tax deductions without worry or concern.
SEP IRA? i401k? Solo-K? How much? Limits? All good questions. We have the answers.
At Jerod Ostermeier CPA, CFP® we are tax and business consultants, not just number crunchers. Anyone can balance a checkbook. Anyone can put the right number in the right blanks. We take a consultative approach to your small business tax preparation. You can always find someone to do it for less- of course. However consider the solid back-end support which you will get with the Jerod Ostermeier CPA, CFP® that other tax preparation companies and firms might not provide.
Keeping accurate records can be easy, especially if you have a dedicated checking account for the business. Two elements are required to meet IRS standards- a written log or record of the business purpose, and evidence of the amount paid, date and to whom. Bank account or credit card statements in conjunction with financial or accounting software will cover most of your business expenditures. A trip to a store would probably require a detailed receipt since you can buy office supplies and groceries.
The most repeated mistake that small business owners commit is to spend “corporate” funds on personal items. Do not pay the house mortgage with your business checkbook. Write a check to yourself (or make a transfer), and then write the mortgage check. Items such as gas for your car seem business related- unless the vehicle is 100% business use, then it becomes a mixed use vehicle, and the gas purchase should be handled the same way as the mortgage check. Then, you turn in expense reimbursements to your company for the expense. This is called an Accountable Plan- contact us for more details.
Is your business a hobby? There is a step by step criteria that the IRS and Tax Courts will use to determine if you have a genuine profit motive, or if you have a hobby.
Small business owners are required to pay taxes on two levels- one is income tax. The other is self-employment taxes (or FICA and Medicare in the W-2 world). These combined taxes could easily be 25% to 30% of your net income. If you see yourself earning more than $40,000 net income, please contact us for possible tax savings.