disabled access credit

Business Tax Credits

Tax credits help your business save money by cutting your tax. Tax credits are especially beneficial to those in lower tax brackets. The key to utilizing these credits is understanding what tax credits your business may qualify for.

For a full list of possible business credits and their associated tax forms, click HERE. Otherwise, here are some more common credits available to you:

Disabled Access Credit

If you provide access to your business for people with disabilities, you could be eligible for a credit. This credit is applicable to the expenses incurred in making improvements to your business to increase access. The credit amount is up to 50 percent of the cost of your upgrades, but cannot exceed $10,000 per year.child care credit

Employer-Provided Child Care Credit

These days, child care costs are an exponential expense to your employees. Businesses who directly pay for the child care expenses of its employees can claim this credit. This credit is for up to 25 percent of childcare expenses, with a maximum of $150,000 per year.

Investment Credits

What does your business invest in? If you choose to invest in reforestation, building rehabilitation and alternative energy properties, you could receive a credit of 10 percent of these investments. This credit has a $10,000 per year limit.

Research Expenses Credit

This credit is in place to encourage domestic research and development. The calculation of this particular credit is less straight-forward, and the definition is broad. Generally speaking, the following activities may qualify your business for this credit: developing prototypes or models, streamlining internal processes, environmental testing, applying for patents, etc.research credit

Small Employer Pension Plan

You don’t have to be a big business to provide your employees with a pension plan. This credit applies to starting a pension plan for your employees. The credit is for up to 50 percent of setup costs, not to exceed $500 per year.

Work Opportunity Credit

If your business hires employees that have faced significant barriers to employment, you could qualify for this credit. Such individuals might include veterans, food stamp recipients or ex-felons. The credit amount is calculated based on the wages paid to these types of employees, but range from $1,200 to $9,600.electric vehicle credit

Electric Vehicle Credit

If you’re in the market for a new company vehicle, make it a car or truck that draws energy from a battery with at least 5 kilowatt hours of capacity. This hefty credit ranges from $2,500-$7,500 for qualified electric drive motor vehicles. The amount of the credit is largely determined by the battery capacity in excess of 5 kilowatt hours.

All of these potential credits should be discussed with your CPA to determine whether your business qualifies.

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business expenses

Deductible Business Expenses

The best way to find out what business expenses can be deducted from your income is to consult with your Simma Flottemesch & Orenstein representative. Reducing your business’s income by expenses means you have less money to pay taxes on. However, the scope of potentially deductible expenses is a wide range. Do yourself a favor and keep as detailed records as possible, especially when it includes the following:business expenses

General Business Expenses

Unfortunately, there is no master list of what the IRS allows your business to deduct. Instead, your CPA can help you determine whether certain expenses are incurred as a “cost of carrying on a trade or business.” At a minimum, these may include:

  • Office supplies
  • Utilities
  • Furniture and equipment
  • Software
  • Advertising
  • Rent or mortgage payments
  • Wages, salaries, bonuses, commissions and employee health insurance premiums

The IRS also requests, in the classification of these expenses, that they be “ordinary and necessary.” It defines such as “an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.”

Other Business Expensesauto expense

You are allowed to deduct up to 50 percent of the costs of meals and entertainment when those outings are associated with business operations. Therefore, the event must take place immediately before, after or during a business discussion.

If you are staying on top of your business knowledge through the use of trade magazines, business seminars or other learning materials, these books, magazines and educational programs can be deducted from your taxes. Make sure the subject matter of these materials contribute to your ability to run, maintain or improve your business or trade.

When you start your business, any startup costs are considered capital expenses rather than business expenses, since business expenses cannot be incurred until your business is up and running. In the first year of business, up to $5,000 of your capital expenses can be deducted. What remains beyond that $5,000 can be deducted from your taxes for up to a 15-year period.

Special Expense Deductionshome office

Home office and auto expense deductions are calculated in two different ways. These methods include the standard method or the actual method. For auto expenses, the standard method is a deduction of 53.5 cents per business mile, plus toll and parking fees. The home office standard method allows a deduction of $5 per square foot, with a maximum of 300 square feet, or $1,500. Using the actual method for auto expenses requires you add up all auto expenses (gas, repairs, oil changes, etc.), and multiply the total by the percentage of miles that were used for business purposes. The actual method of calculating your home office deduction requires you add up all home expenses and multiply it by your home office percentage (office square footage divided by your home’s total square footage). For the home office, any expenses related to the space are included if the space is used exclusively and regularly for business.

Working with a CPA from Simma Flottemesch & Orenstein will maximize your business expense deductions by making sure all expenses relevant to your business are accounted for. Doing your taxes yourself often leads to these deductions slipping through the cracks or being inaccurately recorded. Get peace of mind when you prepare your taxes with a professional from our offices.

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invoice

Interpreting Invoices

Whether you are sending or receiving invoices, it’s important to understand the terms and conditions being dictated by the invoice. So much of doing business between a buyer and seller is about meeting or exceeding expectations. This not only includes what you are expected to delivery as a seller to your buyer, but also what you expect in terms of payment from that buyer.invoice

If your business is sending out invoices, for services rendered or products sold, there are a few options that you can specify in your invoicing that will relate back to payment terms. Sending out an invoice is only the beginning of collecting monies due. Payment terms will keep your cash flow on a more predictable schedule. First and foremost, a key component of receiving your money faster is by invoicing as soon as possible. Pushing back your invoicing pushes back your payday.

In general, keep your invoice verbiage both professional and customized to your client. This means: address the client specifically, clearly and politely describe the invoice terms, and show them you appreciate their business. Invoice terms will typically include information about the accepted forms of payment, a due date for payment, and late-payment penalty details, if any. For late fees, an interest charge is better than a flat fee. Opt for an interest charge over a flat fee, and continue to tack on these fees the for each term the invoice continues to go unpaid (Example: a 30-day invoice would charge 1.5-2% interest every 30 days past the initial 30-day due date).

For a long time, 30 days were standard payment terms. However, as modern invoices are being sent electronically, with the ability for online payments, 30-day terms are becoming less common. Invoices can be sent faster, and payment can be received faster. By setting shorter payment terms, today’s invoices are being paid faster. On bigger bills you may want to provide some leniency, but in these cases, you might consider offering a discount for faster payment. By knowing your industry and your customers, you can usually determine the appropriate length of payment terms for your invoices. Invoice terminology has been studied, and it has been determined that “days to pay” is preferred to technical terminology like “net 30.”invoice payment

Additional ways to speed payment

  1. Avoid confusion between parties by discussing payment terms before delivering on your product or service.
  2. Follow up with clients on unpaid invoices. Invoicing software will often let you enable automatic reminders to be sent to clients.
  3. Be as detailed as possible about what you delivered or performed for your client, while keeping the invoice clear and easy to understand.
  4. Continue to follow up with clients who let a due date come and go. By email, phone and face-to-face, don’t allow debts to go unpaid.
  5. Create a policy for late fees.

Overall, the best invoicing system is one that is streamlined and efficient. Modern software has helped this process, allowing for electronic invoicing, reminders and easy online payments for customers. Have templates and systems in place that allow you to cut down the time you’re spending on creating, sending, and chasing invoices.

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c-suite

Outsourcing C-Suite Roles

Increased technology has allowed the outsourcing of many business roles, but could this also include your C-suite, or leadership, roles? This is becoming especially common for the CFO (chief financial officer) and CMO (chief marketing officer) positions. Less common roles, like chief investment officers or chief information security officers, may be outsourced as well if they are required for the company’s operations. Companies today can hire for these roles on a part-time or fractional basis.c-suite

With the modern ability to work remotely, individuals in these roles have the ability to work for multiple clients from one source. Traditionally, companies have had numerous layers of management. But with the growth of information technology and increased automation, companies today are able to operate under a leaner structure.

Is it right for your company?

The companies benefiting the most from this trend of part-time executives are small and mid-sized companies. They can tap into the expertise and leadership of these executives without paying for a full-time role they can’t afford and realistically, don’t require for business operations. Cyclical or seasonal operations can produce long lulls for some of these roles, so it’s more cost-effective to pay a more qualified part-time executive than a less experienced, full-time executive.

The alternativec-suite

A small business owner’s first instinct is to not hire for the role at all, but instead, to try to take on some of the tasks in addition to their ownership and leadership roles. We caution, however, that this can end up being a more time-consuming, and less cost-effective, solution. Owners are already being pulled in numerous directions. Adding these additional roles to your plate, for the sake of saving some money, can lead to long-term costs from mistakes and errors that may be incurred by novice work.

Rather than take on these roles yourself, consider outsourcing as a solution for filling these roles with part-time, qualified candidates.

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summer work

Summer Success Strategies for Small Businesses

Memorial Day has come and gone, and whatever weather your June finds you in, summer is here. What does that mean for your small business? For some, it might mean a slower time in the office, but for others, it’s a time to capitalize on their seasonal business income influx. Regardless of your specific situation, everyone can make the most of their summer by taking notice of the goals and projects that are important to year-round business success.summer bench

Utilizing downtime

Do your employees take the kids on vacation and hit the river or lake in the summer? Are there fewer clicks on your website and social media pages? Get productive during this downtime, and set a few summer goals for your business. Improve operations that your company struggled with during a different time of the year or tackle a project that’s been on the back burner. Declutter, streamline, and generally improve your business and its systems.

On the flipside, does your business peak during the summer months? Perhaps you’re in the field of lawn and garden products, pool systems or air conditioning services? Evaluate your staffing needs so you aren’t surprised by a leap in demand. Capitalize on the business increase with employee incentive plans.grass laptop

Improve your business

If you haven’t already, get your business a mobile website that is optimized for search engine functionality. Get your business up and running on all the applicable social media platforms as well. While the clicks are down in summer, streamline these digital processes to make real-time engagement with your followers easier during the busier months.

Take this time to target your top prospects. If it’s a season for focus in your realm, it just might be their time to consider new offers as well. Use this period to plan for the rest of the year, especially for a big fall marketing plan push prior to the holiday season. Foresight in your planning will take some of the stress out of managing your small business. Is it time for a new look—for your office or your brand? Summer is a great time to work on rebranding anything and everything from your office space to your marketing materials.minneapolis summer

Increase employee productivity

Don’t let productivity slump this summer season. Gather employees and use the extra time on your hands to reconnect and get feedback. Host an employee appreciation party or campaign to encourage employees to continue to stay busy during the slow times. Offer an incentive for increased productivity with an employee promotion campaign. In companies where sales are a key component, offer an extra incentive for increased sales during the summer, much like you would during the holiday season.

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tax calendar

Tax Date Calendar for Small Businesses

April 15 may be in your rear view mirror, but your business still has tax-related obligations throughout the year. Don’t let these dates sneak up on you unexpectedly. Know what you need to file and when for the upcoming year:tax preparation

June 17, 2019: Q3 Estimated Quarterly Income Tax Payments Due

If your business pays estimated quarterly taxes, and these payments were prepared along with your Simma Flottemesch & Orenstein tax return, this is the deadline for your Quarter 2 payment.

September 16, 2019: Q3 Estimated Quarterly Income Tax Payments Due

Time to make your Quarter 3 payment.

September 16, 2019: S-Corp and Partnership Extension Deadline

Did you receive an extension for your S-Corp or partnership tax return? Then this is your deadline for submitting the return and payment.

October 15, 2019: Extension Deadline for Individuals, Sole Proprietors, LLCs and Corporations

This is the deadline for submitting your return and payment for any extended individual, sole proprietor, LLC or C-Corp tax returns.

December 31, 2019: 401(k) Deadline

Any contributions to you or your employee’s 401(k) but be completed by the end of the year if they’re to count toward your 2019 return.tax calendar

January 15, 2020: Q4 Estimated Quarterly Income Tax Payments Due

The taxes that were estimated for Quarter 4 are due in mid-January.

January 31, 2020: 1099 and W-2 Mailing Deadline

For your traditional employees, you must get their W-2 forms in the mail by the end of January. Any 1099s for contractors you worked with during 2019 must be postmarked by January 31 as well.

March 16, 2020: S-Corp and Partnership Tax Return Deadline

S-Corps and partnerships must file their 2019 tax return and submit payment by March 16, a month before the individual return deadline.

April 15, 2020:

  • Tax filing deadline for individual, sole proprietor, LLC and C-Corp returns
  • Q1 estimated quarterly income tax payments due
  • Simple Employee Pension (SEP) contribution deadline
  • IRA contribution deadline, for both traditional and Roth IRA accounts

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bookkeeping

Should I Hire a Bookkeeper?

When you’re running a business, determining where to spend your money can be a difficult decision. All businesses, but especially small businesses, look to make informed decisions on expenditures. With the growth of technology and software, some small business owners are opting to save money by doing their own bookkeeping. But is this option for everyone? No. Consider the pros and cons of diving into performing your business’s bookkeeping duties before you consider yourself a savvy spender.bookkeeping

CPAs vs bookkeepers

There are numerous functional differences between the roles and responsibilities of CPAs versus bookkeepers. While the two often work closely together to fulfill client needs, they are not interchangeable. Bookkeepers manage the day-to-day financial operations of the business. This includes recording all types of transactions related to money moving in and out of the company. This role also usually encompasses invoicing, bill paying and payroll processing. Additionally, bookkeepers prepare reports, both monthly and yearly, to provide a clear picture of the business’s financial standing.

CPAs, on the other hand, are accountants that have passed the certification requirements of their state’s accounting board. This certification outlines the minimums on education and experience before these accountants can perform their role of advising business owners and preparing financial statements. An accountant will utilize the reports prepared by a bookkeeper to interpret the immediate and projected financial health of the business, as well as advise owners on financial decisions. CPAs are required to stay up-to-date on the latest laws and regulations that affect your businesses finances.bookkeeping

Bookkeeping applications

Accounting software cannot replace the knowledge and experience of your CPA. However, some businesses are seeking to replace their bookkeepers with modern bookkeeping technology. These computer applications aim to automate your financial processes, and the best versions do so by connecting the software to your business’s bank account and credit cards. When choosing a software, it’s also important to find a system that is capable of generating necessary financial reports. Both Quickbooks Online from Intuit and Xero are ranked high as software for small business accounting and bookkeeping. FreshBooks and Zoho Books are also in the top rankings, although FreshBooks is best for freelancers because of its strong invoicing tools and Zoho is best for really small businesses. All have monthly plans that are similar in price.bookkeeping

Considerations

Be cautious about that sticker price and take it at face value. While these automated tools may seem like simple, cheaper solutions than hiring a bookkeeper, there are some variables to consider. First, not all of these applications are easy to use or quick to learn. What is your time worth? Most business owners have a full plate of duties and responsibilities, so adding bookkeeping to that agenda can be a taxing endeavor. In which case, it may pay more dividends to enlist an expert. The money that automated bookkeeping services may save you could be eaten up by the time that it costs you to become familiar with it. These programs, while automated, are not one hundred percent reliable. There may be occasional downtime for updates and maintenance to the program. Also, it can difficult to know all the functions you will require from software when you start out doing your own bookkeeping, and customer service for these platforms is not created equal. Don’t jump into this decision lightly, and consider the pros and cons for yourself and your business by trying to tackle the task of doing your own bookkeeping.

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boss

Employees vs. Independent Contractors

What is the business relationship between you and the people who do work for you? Are they employees or independent contractors? The implications of these scenarios can have big effects on your business operations, especially for small businesses. The two are very different working relationships, and incorrectly classifying your workers will likely lead to repercussions with the IRS.employees

Employees

Employees provide services for an employer. They are under an implied or express contract of hire, and this contract allows the employer to determine the details of work performance. The IRS determines whether an individual is an employee or contractor based on degrees of control and independence in the working relationship. Under common-law rules, “anyone who performs services for you is your employee if you can control what will be done and how it will be done.” Employees will fill out a Form W2, while an independent contractor completes a 1099-MISC. The default classification for workers is W2 employees.

Pros

Employers have complete control and direction over an employee’s work and wages or salary during their work time. This means, they determine training, job requirements and responsibilities for the position. Full-time employees perform 30 or more hours of work for you per week. Less than 30 would qualify the worker as a part-time employee. Generally, employees have an ongoing commitment to you and your business. Employees enjoy job security, and the lack of job security for freelancers usually leads them to charge more per job. Tasks can be permanently delegated to your employees, while freelancers have no obligation to be on call for you or your business.

Cons

There are laws and regulations you must uphold, being in charge of employees. These are required by both the state and federal government, and include regulations related to pay, overtime and other work rules. In the tax realm, if you have employees, your business is required to comply with payroll tax requirements. This includes paying half of Social Security and Medicare taxes, and collecting the other half from the employee. You are also responsible for paying unemployment insurance and worker’s compensation insurance. The added overhead of these expenses is often what drives employers to misleadingly employ independent contractors. While you are not required to offer benefits like health care and vacation time, full time employees will often expect these fringe benefits.

Independent Contractors

The IRS qualifies independent contractors in the following way: “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” Here, the other party is self-employed, so the two parties are acting in a working relationship between two businesses, where one is providing a service to the other. When you hire an independent contractor, you can assign duties or projects, with an imposed deadline, but you cannot dictate how the job is completed. Thus, most independent contractors are hired with a contract that provides a defined period of employment, with the option to renew as many times as needed.contractor

Pros

Independent contractors can complete work and projects for multiple employers, but often provide their own tools for completing the job. They are ideal for smaller, as-needed projects for your business. As a whole, small business owners prefer to hire as-needed freelance work. Pay is usually hourly or outlined in a contract, and you are not held to a salary. Besides being responsible for their own taxes, contractors are also responsible for their own permits and professional licenses, if needed for the task.

Cons

Independent contractors are entitled to set their own hours of work. There are very little tax responsibilities you will be held to for independent contractors you hire. You will report any contractor’s income on a form 1099-MISC, but, as the hiring agent, you do not have to withhold any taxes from your payments to a contractor. However, contractors have no responsibility to you or your company, in terms of loyalty. They are free to take on work on a first term, first serve basis. In addition, they work under their own brand, not your company’s.

The difference

If the work required needs to be completed under your supervision or you have control over the tools and equipment used to complete the work, then you are hiring an employee. Also, if the work is long-term or essential to your business, you are employing an employee, not an independent contractor. If the work is not essential to your business operations, is short-term and can be done without supervision, then hiring an independent contractor is applicable.

Misclassifications

If the IRS believes you are misclassifying your workers, it may be cause for an audit. If you incorrectly classify an employee as an independent contractor, you could be liable for unpaid employment taxes. Workers who feel they have been misclassified can file Form 8819, Uncollected Social Security and Medicare Tax on Wages for the entire duration of their compensation period. If you are still having trouble deciding which category your workers fall into, file Form SS-8 with the IRS: Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

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supplies

Deductible Business Expenses for Small Businesses

The IRS requires that deductible business expenses must be both ordinary and necessary for business operations. If an expense is common to your trade or business, it is an ordinary expense. A necessary expense is helpful and appropriate to the operations of your business or trade. Deducting these qualifying expenses lowers your income tax bill. Even common business expense deductions may not apply to your specific small business. Working with a CPA from Simma Flottemesch & Orenstein will help you hone in on what expenses apply to your business, and how to make the most of these deductions.

Common small business deductions

Advertising: 100 percent of costs associated with advertising and promotion of your business, including business cards, are deductible.

Business meals: business-related meals that can be supported with proper records (amount, date, location and business relationship of other diner(s)) are 50 percent deductible. *Tip: on the back of the receipt, write down the purpose of the meal, who you dined with and what you discussed.

Business insurance: business insurance costs can be deducted on Schedule C.

Car: if your vehicle is used solely for business purposes, all the costs associated with its operation can be deducted. More commonly, vehicles are used for business and personal use, in which case only the costs associated with business-related usage can be deducted. When you claim mileage for business use of your vehicle, there are standard mileage deductions that change yearly, or you can deduct actual costs. In 2018, the standard mileage rate was 54.5 cents per mile, while that amount has increased to 58 cents per mile in 2019.car

Charitable contributions: both corporations and individuals can deduct charitable contributions to qualified organizations on their tax returns.

Depreciation: large business items depreciate over their lifetime of use. Higher priced items with a longer life of use should be depreciated, rather than deducted upfront.

Education: costs associated with training or improving the knowledge and skills of you and your staff add value to your business and are fully deductible. These costs, for classes, seminars, subscriptions, books, workshops, etc., must increase your expertise in your current field, not qualify you for a different career.

Home office: the IRS has standardized this deduction—you can deduct $5 per square foot of your home that is used for your business. This amount maxes out at 300 square feet. It’s important that this area of your home qualify under three areas: exclusivity, regularity and precedence. This means that the area must be used exclusively for business, be used regularly for business operations or responsibilities, and be used as the principal place for conducting important business activities. A portion of renter’s or homeowner’s insurance can also be included in this deduction.home office

Insurance premiums: whether your business owner’s policy covers malpractice, flood insurance, cyber liability coverage, business continuation insurance or all of the above, the costs are fully deductible.

Interest and bank fees: interest that is incurred on business loans or credit cards, in addition to fees and bank charges on your business bank accounts, can be claimed on Schedule C.

Legal and professional fees: the fees charged by Simma Flottemesch & Orenstein to prepare your tax return are included in these deductible fees. These fees would also include any bookkeeping fees charged by a bookkeeper or bookkeeping service.

Medical expenses: as a small business, you may qualify to claim a tax credit up to 50 percent of premiums paid for employees, which would be a better tax break than a deduction. If you are self-employed and paying your own health insurance premiums, those costs are generally deductible. However, there are some exceptions, like if your spouse has an employer plan you could opt to participate in. Consult your tax professional to determine how this deduction applies to your specific situation.

Rent and utilities on business property: if your business operates in a rented space, the cost of renting the facility is fully deductible. Additional deductible utilities for the operation of this space include electricity, internet and phone charges (mobile or landline).

Salaries and wages: what you pay employees for salaries, wages, bonuses, commissions and taxable fringe benefits are deductible business expenses. Owners do not qualify as employees.

Supplies: business office supplies, furniture and other equipment are all deductible. It’s important to keep all receipts related to the purchase of these items. In today’s digital age, office electronics can also be included. Think of your laptops, tablets, smartphones and the software used to operate them in relation to business activities.supplies

Travel expenses: a business trip will only qualify as business travel if it is ordinary, necessary and away from the city or area in which you conduct business. Travel must last longer than one normal day’s work. Potentially, the deductible expenses from this travel may include transportation-related costs, meals, lodging, parking, tolls, tips, business calls, etc.

This list is by no means exhaustive, but it is a starting point for determining what business expenses are deductible on your return. Every scenario is different, and your tax professional will determine which deductions you qualify for. It’s important to keep records throughout the year of these expenses.

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self employment taxes

What Are Self-Employment Taxes?

Self-employment taxes are established by SECA tax—Self-Employment Contributions Act tax. This tax is a stand-in for FICA paid by employers and employees. When you are employed, withholding covers Social Security and Medicare program contributions. Employers must also make additional contributions to these on behalf of each employee. Self-employment taxes exist to contribute to these programs by the self-employed. The self-employed do not escape these tax obligations, and are instead burdened with the full contribution, rather than sharing the FICA contributions with their employer.self employment taxes

If you earn $400 or more from your self-employment income, you are required to file a tax return. Generally, 92.35 percent of your net earnings from self-employment are subject to the self-employment tax. Your contributions will be made in the following way: 12.4 percent to Social Security for the first $128,400 of earnings (for 2018) and 2.9 percent to Medicare on all earnings.

Figuring the tax

Schedule SE helps you calculate how much self-employment tax you owe. This amount is then reported on your 1040 as “Other Taxes.” Fortunately, a portion of your self-employment tax payments can be deducted as an adjustment to income on your 1040. Whether you itemize deductions or not, you can claim 50 percent of your self-employment tax payment as a taxable income deduction.

Estimated taxes

Again, when you work as an employee, withholding throughout the year contributes to your total tax liability. When you’re self-employed, this isn’t an automatic mechanism. Therefore, it may be worth paying estimated taxes throughout the year, in quarterly installments, to avoid underpayment penalties. Discussing your options and forming a plan with a Simma Flottemesch & Orenstein team member will help you prepare for and determine your best course of action.self employment taxes

Reducing your self-employment tax

If you’ve read our previous posts on the tax implications of selecting your business entity, then you should know that S Corp elections have the opportunity to reduce your self-employment tax liability. Under this entity, you would be paid a salary out of earnings and the remaining profits would be distributed to yourself, shareholders, partners or left in the business. The amount in excess of your salary is subject to income tax, but not self-employment taxes. In an upcoming blog, we delve into determining a reasonable salary from your S Corp.

Schedule C calculates your net profit from self-employment. Be very thorough in preparing this form, deducting every possible business expense. Business expenses must be ordinary and necessary to operate your business. Deducting these expenses will lower your net profit, and, in turn, lower your self-employment tax bill. We will dive more in-depth on what qualifies as a deductible business expense in our next blog.

 

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