When it’s tax time, it can be overwhelming, stressful, and time-consuming. Those who operate small businesses, perform contract work, or freelance from home can run into additional headaches with itemizing expenses and figuring out whether it’s advantageous to take the home office deduction. Tax specialists and accountants can help alleviate these burdens by doing the tough part of the job. A thorough tax consultant will ask questions related to the nature of the business, where the business is conducted, and ask for financial records.
Claiming business or self-employment income on a tax return requires filling out additional forms. Schedule-C and the form for self-employment taxes are the most common. Yet, if a business is conducted from home or a personal vehicle is used part-time for activities related to a business, it’s crucial to find a way to track what portion of the expenses are spent on business versus personal use. One way is to determine usage by percentage, meaning what percentage of time the asset is used in business activities versus personal activities. For instance, a vehicle might be used forty percent of the time for business reasons and sixty percent of the time for personal reasons.
Some small business owners prefer to do their own taxes, even if the process is complex. Yet, using the services of consultants who have expertise in accounting in Melbourne FL can save hours of research and prevent mistakes. Tax codes and instructions can be difficult to interpret and understand, especially if one is unfamiliar with all of the options and implications of those options. A tax professional can help prevent costly errors, while ensuring all applicable rules are followed and every opportunity is taken to ensure the tax paid is the tax someone really owes.
Preparing for tax season is a year-round activity for small business owners. Keeping track of expenses related to the business and separating out expenses related to the use of personal assets are activities that cannot wait until the last minute. Qualified tax professionals can ease a lot of the stress when it’s time to file and figure out how much tax is owed. Contact us for more information on services related to taxes and Accounting in Melbourne FL.