Now that tax season is upon us, managing your firm’s cash flow becomes an even more pressing issue. Having the tools to combat these problems will reduce business owners’ worries and strengthen the confidence of the employees in the firms operations. This is no easy task, particularly for healthcare providers. Tax laws and regulations are quite stringent, and your time is much better spent focusing on growing the business. Follow these key strategies and you’ll find that your headaches during this tax season will substantially decline:
Effectively Use Equipment Deductions
Recognizing depreciation on equipment and writing off mileage expenses can significantly reduce a company’s tax burden. IRS Section 179 highlights deductions that business owners can take related to various fixed assets, as well as real property. Maximum deductions under this section go up to $500,000 beginning in 2015. Other equipment that is considered “qualifying equipment” includes software, computers, and office furniture, all of which your firm can use as deductions. Likewise, as of the 2016 tax season, mileage expense rates are 54 cents per mile for standard businesses. However, if your firm specializes in medical mobility (i.e. a non-emergency transport company), you will only be able to deduct 19 cents per mile.
Keep Comprehensive Records and Have a Strategy
Most people don’t have the time or the energy to properly file their business taxes while recognizing all of the potential deductions. Having a strong relationship with a local accountant or CPA firm is vital; these professionals are veterans of the tax industries and are paid to find your firm the best deals and tax breaks possible. Likewise, keep extensive notes about purchases, business expenses, and transactions throughout the year. In case your firm is audited, having detailed records such as these can prove to be very helpful.
Utilize Tax Breaks from the Affordable Care Act
With the implementation of comprehensive healthcare legislation overhaul through President Obama’s Affordable Care Act, many small businesses have the ability to take advantage of tax-friendly benefits of these new programs. Tax credits include deductions for payment of employees’ healthcare premiums, which are for businesses of less than 25 people. According to IRS.gov, employers must select a qualified health plan through a Small Business Health Options Program, otherwise known as the SHOP Marketplace, in order to qualify for additional credits.
Investing in Alternative Energy Sources Have Tax Benefits
With climate change as a fundamental issue that our society is grappling with currently, the government is subsidizing investments in alternative energy for small businesses. Having the capability to use wind power or solar energy in your day-to-day operations means that not only are you using green, renewable energy, but the government will reward you through various tax exemptions and subsidies.
By using just a few of these helpful tips, you should see your taxable base of income decrease, which allows you to focus more on what’s important: growing your small business. If your firm requires additional cash to meet these various tax obligations, reaching out to an alternative financing company could help alleviate that problem.