Tax Planning for Small Business
Updated: Dec 23, 2020
Planning for your tax situation doesn't need to be intimidating. There are some things to be aware of and some answers to hunt down. This article has more questions than answers, but don't worry, you can read the full article by following the link at the bottom. Or just call us. That's what we are here for.
1. Tax planning starts with understanding your tax bracket First things first. Where does you income land you and why does it matter.
The United States has a progressive tax system. That means people with higher taxable income are subject to higher tax rates, while people with lower taxable income are subject to lower tax rates. There are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
2. The difference between tax deductions and tax credits Is that a deduction or a credit? Can I deduct my dry cleaning? What about my daughter's vehicle? And what is a tax credit? All good questions with answers we can help provide.
3. Taking the standard deduction vs. itemizing A standard deduction can be the way to go if it supplies you more or about the same as what you would get itemizing - but how do you know? An accountant can help you with that.
4. Being aware of popular tax deductions and credits Did you know that if you adopt you can take a sizable deduction from your taxes? And that your office space costs are also deductible, even if it is office space in your home? Many people overlook these popular deductions, and credits. Did you know you can get a credit for the amount you contribute to an IRA, if you are in a particular income bracket?
If answers to these questions keep you up at night, you can read more here. Just want to hand these things over to an expert? Call us. We know this stuff like the back of our hands and we love to help you and your business, regardless of its size.
Original source: Nerd Wallet - https://bit.ly/2V1EuxI