Although, small businesses do not get the hefty tax breaks with the new law, they will enjoy a 20% reduction in taxable business income. This was done in order to allow US entrepreneurs to compete with other countries.
Across the board, Congress has given entrepreneurs an incentive to use this saved money for their businesses to increase its well-being and long-term success. Use this money to grow. Use your new tax savings this year to hire new employees, expand your business into new territory, purchase more inventory, pay down debt, or even give yourself a raise (you have earned it!).
In combination with your lower business tax rates, you can even use your lower individual tax rates to lower your tax bill.
Although the changes were sudden and you probably did not have enough time to make your adjustments to your strategic plans and budgets, we advise that you meet with us to understand your full tax saving opportunities.Small Business Owners Win Big
Bass v. Commissioner of Internal Revenue Service (2018)
Recently this case was brought to the United States Tax Court that deliberated a controversial topic amongst all business owners. A taxpayer (plaintiff) claimed that he had $4,000 in automobile and miscellaneous expenses he could claim from his landscaping business on his tax return. However, the Tax Court ruled that the taxpayer could not claim these expenses on his Schedule C because the taxpayer comingled his personal and business expenses preventing the court from estimating his tax liability.
Moral of the story: Take the extra measures to separate your expenses.
Here are some tips that you can use and ways to provide documentation if you happen to get audited:
· Maintain separate checking accounts and change their names depending on which account it is
· Use a business credit card
· Make your business official: establish a LLC or S Corp for your business to reduce your risk and headaches (we can go over a possible organization structure for you)
Schedule C: Case Study
Having trouble accelerating your cash inflows? For many business owners, collecting on your receivables can be challenging. Some people are stuck in between the spectrum of not coming off as pushy and being way too relaxed. Your business needs profits to live and grow. There is nothing wrong with setting a couple of guidelines to ensure a steady stream of cash.
Here are some tips below:
· Define your policy and stick to concrete credit guidelines. Train your staff to make the right calls when it comes to customers and what actions to take.
· Explain your policy to your customers in clear writing your payment terms.
· Be on time regarding issuing invoices. Depending on your business’ structure, always send invoices to customers upon completion of a service or transfer of goods.
Profits are important to your company and it is your priority to get your funds. If you are having trouble setting up your payment structure then contact us! We can specialize a structure for you to solve your cash flow needs.
Tips for Getting Paid on Time
