Tax planning strategies for small business owners
IRS highly recommends to consult a a Tax Professional or an Enrolled agent to make the entire process easier and hassle-free.
These experts have decades of experience in this industry and are capable of adding dollars to your account by their tax preparation strategies.
We have listed some of the points to be taken care of, to make the entire process easier:
1. Collect Personal as well as Expense Information
In order to make the process hassle-free, it is very essential to keep it systematic by organizing and sorting the data into the categories that we have listed below :
This includes the details as well as legal names of the individual , spouse’s and all the dependents in the family. Along with this, it comprises the date of birth and social security numbers of all the members. You need to keep your bank account, routing numbers, and transaction details handy.
1. W-2 forms from any employers you worked for in 2020.
2. 1099 forms for any contract work you completed if you earned more than $600 total.
3. Investment for unemployment or social security benefits.
4. Total revenue generation from the previous year’s state and local tax returns.
5. Income generated from any rental properties you may own.
If you are self-employed and perform freelancing jobs or business, you need to keep this aside from your personal details as different deductions are offered in both categories. You can hire a tax advisor in Los Angeles for proper assistance during the initial process of sorting while filing taxes.
2. Check Out The Personal Deductions
Standard deductions are provided to the people in order to reduce their taxes to some extent. In general, taxpayers can either take standard deductions or itemize their tax deductions. However, if any married couple is filing the taxes separately, both of them should either opt for standard deductions or itemized deductions.
You can download the prior year’s transaction details and highlight the areas where you can avail deductions easily.
3. Many charitable and non-profitable organizations can also apply for tax exemptions, if their earnings are not related to a single individual or any private shareholders. This organization should not have any involvement in political campaigns or political connections and it should serve a noble cause.
You can seek the assistance of our Tax experts at Lakeline Tax to check your eligibility for tax deductions.
4. Try to Avail Tax Credits
Tax credit reduces the total amount that needs to be paid while filing your income tax. On the other hand, tax deductions are used to reduce the amount that is subject to taxation.
Lakeline Tax experts can help to identify the credits and their eligibility for your benefits.
We have listed some of the popularly known tax credits for reducing your tax liability :
Education Credit :
These credits help the students to pay their tuition fees and lets them concentrate on their studies.
Child adoption costs:
In case of any qualified adoption, eligible adoption cost can be claimed as an adoption credit.
Earned income tax credit:
This credit is meant for people with lower income, if a taxpayer falls into this criteria, the tax credit will entirely depend upon their income and if any dependents are claimed on their tax return.
Hire A Tax Advisor:
Professional Tax Advisors at Lakeline Tax can help you to save more, lower your tax liability and make the entire process stress-free.
Tax preparation is done Virtually by uploading all your tax documents through our Secured Portal.
In addition to this, this portal helps users to access the entire tax reports throughout the year. The last step of the process is the signature of the taxpayer, this can be done virtually through e-signatures.
To schedule a virtual appointment click here … or give us a call @ 1-512-335-8037