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  • Daniel Rodriguez

Tax Tips for Small Business Owners in California

Owning and operating a small business is a demanding task. Not only are you expected to understand payroll, staffing, operating costs, and business strategy, but every Spring you also need to understand your company’s tax situation. Filing business taxes and understanding the tax consequences of running your business is often one of the more difficult tasks running a small business demands. For help with your small business taxes, contact the NewPoint Group. Our Roseville, CA small business tax lawyers can help you plan your taxes and file them.

Small Business Tax Help

There are many things you can do to improve the tax situation for your small business. The business tax lawyers at The NewPoint Group have seen various small businesses realize huge savings or avoid big problems simply through their tax planning. If you run a small business, looking into these tax issues may be vital to improving your business:

Choosing the Right Business Entity

Many taxpayers who operate a small business in their own name or as part of a partnership often see huge consequences come tax season. Because these types of business entities are run as a part of your personal financial situation, you must report any gains or losses for the business as part of your personal taxes.

Many times, forming your business as a corporation, a limited liability corporation (LLC), or a limited liability partnership (LLP) helps insulate you from your business. As a separate, corporate entity, your small business can be taxed as its own “person.” While this means you cannot take advantage of any of the deductions for losses in your personal taxes, you are also protected from having to pay out of pocket expenses for your taxes. Instead, you get a salary or paycheck like any other employee and continue to pay taxes for your business as a separate entity.

Finding Tax Breaks

Many small businesses have special tax breaks that often go overlooked. Some apply to business of any size – such as the cost of hiring legal and professional services (including tax lawyers), or even the costs of advertising and office supplies. However, other deductions and credits may be available based on your status as a “small business.”

If you have under 25 full-time employees making under $50,000 per year each, you may be able to claim a small business health care tax credit if you provide at least 50% of their healthcare expenses. Other credits and deductions may be available for things like using good energy policies at your business and maintaining other good practices. Talk to one of our Roseville and Sacramento business tax attorneys to understand what tax deductions your company may be missing.

Avoiding Payroll Problems

Payroll is often one of the most complicated things to understand, especially for new startups or first-time business owners. It’s your job as a business owner to ensure that taxes are properly paid on your end, and for your employees. Every employee is entitled to a paycheck, and every employer is required to withhold some of that to pay their taxes. This means making sure you properly manage their deductions for income taxes, Medicare, Social Security, 401(k) deductions, insurance plans, and other payments. You must also pay your own taxes if you are self-employed. However, you may also be able to claim deductions for much of the cost of paying your employees as ordinary and necessary business expenses.

Filing Corporate Taxes

For many taxpayers, filing your family’s personal taxes is too complicated to do without help. Many taxpayers use software, hire accountants, or otherwise seek help with their taxes. For a full business, things are only more difficult. Not only are the amounts of money often higher, but there are thousands of things you may be entitled to deduct. Paying taxes on your company’s profits may be simple enough, but that pay be far too much tax to pay. Talk to a tax attorney about what deductions you may be missing, what your tax burden should be, and how to best file your corporate taxes.

Handling IRS Audits

The IRS looks at various taxpayers and businesses every year in an attempt to catch irregularities and potential problems. If you have a new startup, you may be able to get away with errors or problems for the first couple years. However, as a company builds a track record of paying taxes that are too low or claiming too many credits, the IRS may become suspicious. It is vital to have experienced tax audit defense if your small business becomes the target of an IRS investigation. The NewPoint Group’s audit defense lawyers may be able to help defend you or your business if the IRS comes knocking.

Roseville, CA Small Business Tax Lawyers

The Roseville and Sacramento tax lawyers at the NewPoint Group help counsel businesses and individuals on how to handle their tax issues. Finding the right credits and deductions for your small business may require the help of an experienced tax lawyer. For a free consultation on your tax situation, contact our law offices today at 800-358-0305.

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