It’s coming — there is nowhere to run or hide. We’re talking, of course, about tax season. The time when business leaders sort through paperwork, trying to figure what’s deductible and what’s not, all the while wondering what they are forgetting. It can be overwhelming.
Fortunately, we reached out to local experts Jeff Baker, founder of Tacoma-based Jeff Baker & Associates, and Edward Harris, founder and CEO of Bellevue-based Tax Resource Centers, to help instruct us on how to navigate tax season with ease.
Baker revealed that the new tax law has opened up a multitude of opportunities, particularly for businesses. Business owners, he said, should be looking for how they can leverage this new law.
When it comes to common mistakes surrounding tax season, Baker said that anyone who has not taken the time to, “investigate tax-saving opportunities that exist in their particular situation,” could be losing big time. He advises finding someone who is qualified to help business owners navigate the waters.
He also added that, “Business is booming and it really is fun to be able to see good things that we are able to do to help many, many people with tax planning, tax preparation, accounting, and a wide assortment of other business, personal, and even estate-related matters.”
Some other things business owners should keep in mind during tax time, according to Harris:
20 Percent Off
The corporate rate has been reduced for 2018-19 and there’s a new qualified business deduction that can help smaller businesses get an extra 20 percent deduction from income that flows through to their personal return.
No More Seahawks Games
Entertainment is no longer a deductible business expense — meals still are deductible as usual — but things like sporting events are no longer a valid expense on returns.
Receipts, or it Didn’t Happen
Small business owners should always keep copies of receipts — whether a hard copy or digital — because a credit card statement or canceled check won’t cut it during an audit.
A Real Boss Ride
It doesn’t matter if a company has a spendy utility vehicle or an affordable sedan, the tax deductions will remain the same. It is up to each individual business whether to take a standard vehicle deduction over one based on mileage. And keep in mind, there are extra federal and state tax incentives for electric vehicles purchased during the last year.