Why it matters for small businesses to pay taxes.
Positivity and taxes are two words you do not expect to find in the same sentence.
Well, taxes can be positive for your small business.
Your small business is more than an avenue for you to grow professionally and increase your net worth. It also enables economic growth and provided resources that can be used for public investment. Your business contributes towards health care, infrastructure, education, and services that keep society fully functional. Look at a few more reasons why taxes matter for your small business.
1. Enjoy Deductions
The IRS does not always take your profits through tax, they also offer some relief through tax deductions. Some deductions that you should explore include business use of your vehicle, health insurance, business trips, and retirement plans. A deduction allows you to reduce the overall amount that you would be subject to through income tax.
2. Filling on behalf of others
As a small business, there are some taxes that you will collect and have to submit on behalf of others – typically employees and customers. Failure to remit these collected taxes will lead to penalties and fees that could affect your bottom line. These taxes include sales tax, withholding tax and unemployment tax.
3. Expensing Allowances
The IRS allows for the cost of depreciable assets to be treated as a current expense instead of a capital expense. This way you can save on taxes each year until the asset is phased out or replaced. Without paying taxes, this benefit would not be available. The alternative would be amplified costs for machinery or equipment that are essential for running your business.
Even with all these advantages, you may view taxes as being burdensome, and time-consuming. Furthermore, without expert support, it can be difficult to understand comprehensive tax laws and ensure that no tax-related issues are experienced.
There are two essential things you need to know about taxes as a small business. The first is to understand all the benefits your business can experience from taxation. Second, you must know all the taxes that are relevant to your business to ensure your compliance. Reach out to an expert CPA from RCN Accounting & Business Advisors and get help ensuring that you always file the correct taxes by the required deadlines. Click here to book a discovery call today.
