Tips to Avoid Tax Season Stress -- and Keep the Most Money in Your Wallet As April 18 approaches, check out some of our best tax-saving advice and stories.
By Entrepreneur Staff •
Nobody likes paying taxes. But, just because it's unpleasant doesn't mean it's unimportant, so make sure you get the most out of it -- or, perhaps more precisely, that you keep the most out of it. Doing your due diligence, on hiring an accountant (or choosing not to), or filing a 1099, or how to use the Section 179 Exemption can save you and your business hundreds of thousands.
Whether you're filing for yourself, a small business or a major corporation, there are plenty of tricks available to save you time, effort and, most importantly, money. So, with tax season approaching, Entrepreneur has rounded up some of our best tax-related content to make a frustrating time just a little easier.
Tetra Images | Getty Images75 Tax Deductions, From A-Z
Life is expensive, from business expenses to personal expenses to paying Uncle Sam. Wherever you go, it may seem like your wallet is open. One way to save money each year is to find legitimate tax write-offs that intersect both personal and business expenses.
As a certified public accountant, Mark J. Kohler is constantly asked the question: "So, what can I write off my taxes?"
Read More: 75 Items You May Be Able to Deduct from Your Taxes
Artifacts Images | Getty ImagesWhat's a 1099 and How Can It Save Me Money?
The 1099 can be mysterious. Business owners guess at its rules and requirements. Tracking changes to the procedures can be so exasperating, some entrepreneurs just give up and file nothing at all. This can be dangerous as penalties can add up quickly. But the 1099 doesn't need to be complicated.
Read More: Time to Send Out 1099s: What to Know
Tom Merton | Getty ImagesShould I Make My Business a Corporation or LLC?
Among the many decisions you need to make when launching a business is selecting a business structure. If you do nothing, your business, by default, is structured as either a general partnership (multiple owners) or sole proprietorship (solo owner). These may be the simplest entities to form, but they offer one major drawback: There's no separation between the business and business owner.
If your partnership or sole proprietorship business is sued or can't pay its bills, your personal assets can be on the hook. That is why both the Limited Liability Company (LLC) and C corporation, or just corporation, are popular business structures, as they minimize the owner's personal liability. Yet, they have vastly different approaches to taxation.
Read More: The 5 Biggest Tax Differences Between an LLC and Corporation
Hero Images | Getty ImagesHow to Handle Your Inventory During Tax Season
A reader told tax expert David McKeegan, "I have just started an online store where I will hold some inventory and want to know how I will be taxed, what tax forms I need to complete and how to value my inventory for tax purposes."
Read More: When It Comes to Taxes, Here Is How to Handle Inventory
Hero Images | Getty ImagesThe Section 179 Tax Deduction (and Why It's Big for Small Businesses)
Did you know that you can get a tax deduction on equipment you purchase for your business? It's a part of the tax code called Section 179. It's been around for a while, but a $1.8 trillion spending bill passed by Congress at the end of 2015 permanently capped the tax break at $500,000.
Read More: The Tax Break That Small Businesses Need to Know About (Infographic)
ShutterstockHow to Keep It Together During Tax Time
Many Americans often ignore or quickly say "No" when asked whether they want a receipt, but not small-business owners. Is this because they spend hours upon hours organizing them during the year and look forward to turning them into their accountant? Um, not necessarily. Savvy business owners simply know how to keep receipts because if they don't, their tax return could be in peril. The reality is: Receipts are audit protection and we have to take that seriously.
Read More: 7 Tips for Keeping Receipts Organized for Tax Time
bowdenimages | Getty ImagesHow Do I Know Which Accountant to Hire for My Business?
When it's time to look for a tax accountant, you want one who not only can help save you money and avoid potential trouble with the IRS, but also can provide useful information for your business. "We tend to think of accountants as numbers people, but a good accountant does more than just figure the numbers," says Ed Lyon, co-founder of the American Institute for Certified Tax Coaches. "A good accountant will communicate what the numbers mean to us."
So shop around, interview accountants and figure out which one is the best fit for you and your business.
Read More: 10 Questions to Ask Before Hiring a Tax Accountant
MariuszBlach | Getty Images5 Slam-Dunk Deductions for Your Small Business
It's tax time and whether they know it or not, small-business owners might be leaving hundreds, even thousands of dollars off the table. In some cases, entrepreneurs simply aren't aware of the deductions available. In others, they don't keep detailed records or shy away from itemizing or complicated number crunching, habits that can be costly in the long run.
To save you headaches, money and time, we've reached out to our tax experts for oft-missed deductions to discuss with your tax professional as the IRS' April 15 tax filing deadline approaches.
Read More: Don't Overpay Your Taxes: 5 Can't Miss Small-Business Deductions
Ken Reid | Getty ImagesHow to Keep the IRS Away From Your Sweat Equity
Sweat equity is trading labor for equity or an interest in the company. What happens when you are paid your sweat equity? The answer is simple. Sweat equity is always taxable. We can blunt the tax burden a variety of ways but equity given in exchange for something with a dollar value is not sweat equity.
Entrepreneurs are usually confused when they hear that sweat equity is taxable. The good news is that there's a way to be smart about sweat equity come tax time.
Read More: What Entrepreneurs Call 'Sweat Equity' the IRS Calls 'Taxable'
