Taxes are a bit different for every business type. While it is important to keep your personal and business taxes separate, some people fail to separate the two. Failing to keep your business and personal taxes separated makes things a bit trickier during tax time. Family-owned businesses should pay attention to the three items discussed below to prevent audits and mistakes.
Section 179 Deduction
Section 179 permits business owners to make deductions for equipment purchased in a tax year. The Tax Extenders Bill is capped at $25,000 per business for expenses to be claimed. To claim this deduction, you complete form 4562 and maintain possession of all of your receipts.
Small businesses and small family-operated businesses may have tax credits available for offering health insurance to their employees. If healthcare is purchased through the Small Business Health Care Exchange, there are more options for competitive pricing and coverage plans to choose from.
It is necessary that your business classify itself properly. Limited Liability Companies do not have any tax liability. S Corporations, partnerships and corporations should file business and personal tax returns. Sole proprietorships are taxed on all profits reported, as there are no separations between the owner and the business.
Closing Thoughts on Family Owned Business Taxes
Enlist the assistance of a tax preparation specialist, and one that has experience with family-owned businesses. Make sure that your business is claiming all of the deductions and credits that it can. New credits or deductions may be available, so view the changes to business tax law before filing your returns.
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