According to Andrew Park, Enrolled Agent at Robert Hall & Associates, although the individual tax deadline normally falls on April 15, taxes are due by April 17 this year. Filing an extension allows you to file your return as late as October 15.
The corporation deadline is March 15, but an extension allows you to file as late as September 15. Mr. Park cautions, “even though an extension has been filed, the IRS and State still expect the tax liability to be paid by the due date. Failing to pay by the initial due date can result in penalties and interest.”
There’s typically very heavy volume at the post office around the April tax deadline. Try and have your taxes prepared as far in advance of April 17 as possible to avoid any unforeseen delays when submitting your personal tax return.
Commonly Overlooked Deductions
Jody Siebert is both an accountant and a small-business owner. Her practice, The Dog Ate My Books, specializes in taxes and accounting services for small businesses in Flagstaff, AZ.
Jody says the most common tax deductions overlooked by small business owners include, “start-up expenses paid with personal funds prior to opening a business bank account, such as tax and legal filing fees, equipment such as a computers, business cards, and website expenses.”
Siebert also says that many business owners forget to track business miles driven with their personal vehicles. There are various apps to track miles or you can even use an “old-fashioned calendar date book” to track your mileage, she says. According to Siebert, there are two methods to calculate the mileage deduction — “standard mileage” and “actual cost.” Having a good set of mileage records on-hand at tax time will help your tax professional decide which method is best for you.
Social Media and Digital Deductions
Paid social media management tools, software subscriptions, e-books, mobile apps, shopping carts, and CRM applications are all deductible if they are used for your business. Ms. Siebert advises that, “since subscriptions are usually automatically charged to a credit card monthly, it’s easy to lose track of these expenses…if they were charged to a personal card.” It’s important to set up a business bank account as soon as possible so that you can more easily track expenses all in one place.
Sibert uses these prompts with her clients to seek out even more digital deductions: “Did you buy a book to help learn to use social media for your business? Or maybe you paid to attend a workshop to learn how to use social media to grow your business. Did you pay to set up a Facebook store?” All of these items are legitimate business expenses and can be claimed if they’re used to support your small business.
As much as we’d like to include this expense, Wray Rives, a CPA and CGMA in Coppel, TX says, “unfortunately a business owner does not get a deduction for the time he or she spends actually promoting the business through social media.” Oh well, maybe next year Uncle Sam?
Consult a Professional
Many people believe that viable tax deductions are only for large companies. Andrew Park begs to differ. Some of the “most beneficial tax savings are derived through incorporating self-employed individuals,” says Parks. He adds, “most deductions that are being overlooked are due to individuals’ lack of planning or unfamiliarity,” with the nuances of tax law.
Finally, Mr. Parks provides perhaps the best tax advice for small-business owners when he says, “find a licensed tax consultant” rather than filing your taxes on your own.
Editorial note: The information contained in this article is for general information purposes only. Sprout Social, Sprout Social Insights, and all of the professionals cited in this article make no warranties, express or implied, about the completeness, suitability or availability of this information with respect to your individual situation. We recommend that you speak with a licensed tax professional to determine the best tax advice and recommendations for your specific needs.