Simple tax moves for small businesses
There are certain ways to decrease tax, which we will be discussing in this article. First of all, you will have to calculate your tax bill. To know your tax liability, you can make use of a withholding calculator of the Internal Revenue Service (IRS). For a rough estimation of the tax, you can make use of your calculated profits, wages earned, rental activities, deductions, and other related information.
Those who owe taxes amounting to more than $1,000, such as partners, sole proprietors, S corporation shareholders, need to pay estimated taxes. In case a corporation has plans to owe an amount higher than $500, it needs to pay estimated tax. It is necessary to pay a penalty to the IRS when sufficient amount is not paid in withholding and estimated tax.
Generally the timeline for using the flexible spending accounts (FSA) is Dec 31. In order to save the tax-free money for medical and dental purposes, this FSA is used. You need to pay the amount in the specified period, failing to which, it expires as per the “use it or lose it” rule. You need to check the spending plan terms with your corresponding provider to make sure if there is any grace period or carryover in your plan.
In case you are expecting an income that is lower than the current income in the upcoming year, you can opt for advance deductions. It implies the expenses can be prepaid which you are about to pay in the year beginning. While doing this, it is necessary to take into consideration the moving parts of the tax reform bill present before Congress. It is always advisable to meet a tax professional before considering your year-end tax moves.
Sarasota Accountant Fajardo And Associates can help