When considering owning a construction, architecture, or an engineering corporation a lot of the tax suggestions are generally the same as a normal organization, but you will find some special points to be made about every tax tip also as some tax tips which are distinctive to these 3 industries.
One tax tip for small companies that will be especially essential for construction, architecture, and engineering firms would be to make certain to fully utilize the auto deduction. Because of the need to visit job sites these industries might have a higher than regular auto expense. You are able to pick either the actual expense method (recommended should you have a 100% company use vehicle) or the standard mileage deduction. Should you choose to use the actual expense method it’s critical to keep track of gas, repairs, oil changes, loan interest, tires, and licenses. Once you pick the actual expense technique it’s crucial to keep in mind you cannot switch back to the standard mileage approach. For the standard mileage deduction you should keep track of miles driven to see clients, going to job sites, trips to the post office, bank, supply store, etc. Company miles do not include travel from your home to your office.
Another tax tip that will save you cash is the home office deduction. For small company owners in one of these 3 fields it’s oftentimes easy to have your home office be your principal place of business since most meetings take place on a job site or at a customer’s office. In order to deduct a home office it doesn’t necessarily need to be your principal place of business, but could also be somewhere you meet clients, or even where you store inventory. When you have a dedicated home office you’ll be able to write off a percentage of your mortgage interest, property taxes, insurance, rent, utilities, etc. Also, in case you use your garage to store inventory or a 100% business use vehicle then you may possibly be able to deduct that space as well.
If you found this post helpful, at Huddleston Tax CPAs, a greater Seattle and Bellevue CPAs, we have a great collection of recorded webinars at Small Business Webcast. Small Business Webcast is a great online community for business owners and professionals to network and learn more about tax, business and legal issues.