With the year coming to a swift end, it’s time already for businesses across the United States to turn their attention to their taxes (if they haven’t already).
As such, here are some tax tips to keep in mind and help your construction company get through tax season without any major issues arising.
Take some time to familiarize yourself with tax code changes
The Tax Cuts and Jobs Act changed a lot of aspects of filing taxes for individuals and businesses alike. Therefore, if you haven’t already briefed yourself on some of these changes, take some time to figure out which elements of your taxes are going to change. For example, tax rates changed for certain tax corporations. For smaller businesses, pass-through taxation has changed as well—these rates are now higher than the rates for C corporations, but there are also individual deductions available for people who earn their income through pass-through entities.
Be sure to speak with a tax professional about all the ways the new tax legislation could impact your business in the coming tax season.
Be responsible with your deductions
It’s always a sensible idea to try to reduce your taxable income and get as many deductions as you can qualify for, but you should also be responsible with how you claim your deductions. If you get a little loose with what you classify as “business expenses,” for example, you can start to expect a call from the IRS.
This is an especially common issue with “mixed-use” deductions for items used for both business and personal purposes. If you run a small construction company, for example, you might have a pickup or two you use for both business and personal uses. It’s important you properly divide the cost to come up with the correct deduction amount.
Work with a professional
If you think filing your own individual taxes is complicated, handling your business’s taxes is much more so, especially when you’re first getting started and aren’t as familiar with the steps you need to take in your filing. We strongly suggest you work with a certified accountant or tax preparation specialist who can complete your taxes accurately and prevent you from getting unwanted calls or visits from the IRS. This will allow you to focus on other, more important areas of your business and avoid having to worry about completing your taxes yourself.
These are just a few pieces of advice we have for you as the year draws to a close and you prepare to hone in on your taxes. For more information and tips, we encourage you to contact us today at Patin and Associates.