2) If your business is incorporated, remember the due date of your corporate tax return this year is March 15th. If you can’t file on time, be sure to file for an extension. The penalties for being late can get quite expensive.
3) If you started your business in 2015, there are a number of important elections you need to consider: accrual vs. cash basis on your tax return, amortize vs. capitalize organizational expenses, election of inventory method, along with other important elections that can have a lasting effect on your business.
4) Doing business out of your home? You could qualify to deduct a home office. As long as you maintain a separate space that is used exclusively and regularly for business and your business does not have any other fixed location. This could reduce both income and self employment tax. But beware that if you are incorporated, this won’t work for you.
5) S-Corporation shareholders can’t deduct the cost of medical insurance paid by their Corporation if they own or are directly related to a 2% or greater stockholder. The good news is they can deduct 100% of the cost of medical insurance on their personal tax return, but to do so they must meet two tests: 1) The cost of said medical insurance must be included in their W-2 for the Corporation. (It is not however subject to FICA.) 2) The W-2 income must be greater than the cost of the health insurance.
6) If you put your children to work, be sure to pay them. A child can earn up to $6,200 before any income tax is due. If you are a Sole Proprietorship, payment to your children may also escape FICA; but even if you have to pay the FICA, because they are employees of your Corporation, it’s still a good deal for both you and the kids.
7) If you are not already incorporated, think about converting your business to a Subchapter S Corporation. This will reduce your liability, give you more control over the FICA taxes you pay, enhance business credibility and separate your business from your personal assets.
8) Choose your accountant carefully. Don’t look for the lowest fee. It’s much more important to get someone with not only the experience to assist you in finding every deduction and tax advantage available, but someone who also will be available to spend time with you learning about your business and teaching you how to get the most out of it.