Owning a successful business is a very satisfying experience for the most part. The one downside is that no one ever looks forward to dealing with their taxes, and businesses have to be aware of them all the time. Some taxes, such as payroll, are a regular occurrence while others, such as equipment depreciation are annual. Then there are options to reduce tax liability in the form of write-downs, equipment and supply purchases, maintenance costs and more. The best way to get ahead of the game is to engage in Tax Planning in Brainerd, MN, which helps a business get ready for April 15th.
The overall goal of engaging in tax planning is to reduce the final tax liability and get into a lower tax bracket. There are many ways that this can be done, and as long as they are done in such a way as to withstand an audit, they are legal. One such option is business entertainment expenses. The IRS defines this as discussing business in an environment that is conducive to talk, such as a restaurant or at a hotel. Outings such as a sporting event are frowned upon due to their boisterous and distracting nature. But, the IRS allows up to 50 percent of the costs for entertainment expenses to be deducted. A business owner who takes clients out throughout the year needs to save his receipts for this very purpose.
Another way to reduce tax liability is equipment depreciation or automobile mileage. Depreciating the asset value of company vehicles is done over time, and lets the business take advantage of the tax deduction over a period of years. In the event the vehicles are used heavily, and the mileage amount is more than depreciation, this can be used instead. The IRS pays a certain amount per mile, and this number changes every year based on influencing factors.
Tax Planning in Brainerd, MN can go a long way towards generating tax savings without triggering an audit. Consult with a Brainerd Minnesota Law Firm to find out how engaging in an annual tax plan can find ways to save money come tax time.