End of Year Tax Tips for Business Owners

Good tax advice for Business owners to review before the end of 2013.

Review subcontractor data. If you paid anyone for services (including incorporated attorneys) more than $600 during the year, you will be required to send a Form 1099 to the recipient by Jan. 31, 2014. Make sure you have your subcontractor’s complete address and either their Social Security number or federal ID number. To prevent problems in obtaining this information in the future, be sure to send each new independent contractor Form W9 upon hiring.  (Fox News)

Equipment – Another area to look for increased deductions is assessing your equipment needs and potential asset purchases (new laptop, furniture, etc.).  Making necessary asset purchases before year-end can increase your permanent deductions as well as offer some additional flexibility on accelerating deductions using accelerated depreciation laws designed to encourage investment.

Don’t spend money that you wouldn’t ordinarily spend just to reduce your tax bill. Remember, $1 spent does not equal $1 worth of tax saved: $1 spent creates a $1 deduction, which (depending on your tax bracket, business structure, and state of operation) will only lead to $.00 – $.60 worth of tax saved. (About.com)

Confirm W-2 and 1099 Information with Employees – Ask your employees to review and confirm their W-2 and 1099 information before the end of the year. Provide your accountant or payroll provider with any updated employee W-2 information prior to the last payroll report in 2012. If you need to file a W-2c form with the IRS to correct any employee’s W-2, immediately notify your accountant or payroll provider of the updated information. (ADP)

Schedule a professional tax planning session. This is especially needed if your profit increased substantially during 2013. Your tax pro may be able to help you reduce your taxable income by implementing some last minute strategies.  (Fox News)

Posted in Franchise News.