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Archive for the ‘Taxes’ Category

Save Money With Tax Tips for Creatives

Wednesday, March 29th, 2017

 

Yes, it’s tax time again. As a self-employed business owner, it’s important for you to have a handle on your business and know what is deductible and what isn’t.

Invariably when I talk about taxes with creative entrepreneurs, someone will tell me they have an accountant. “Terrific,” I say. “But what does she know about your business in particular?” You go to an accountant because she knows taxes. She can be very knowledgeable about small businesses, but she cannot know the nuances of every type of small business. She works with what you give her. That’s why it’s important for you to do your own research, understand tax strategies and keep track of deductions to which you are entitled. Here are nine tips for maximizing those deductions. To be sure that these apply in your particular instance, be sure to discuss with your accountant.

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7 Year-End Tax Savings Strategies

Wednesday, December 9th, 2015

 

 

Tax Tips, Business Tax tipsIt is December! The one time of year when you have a once-a-year opportunity to make some last-minute decisions that can dramatically affect your 2015 taxes. Within limits, you can increase or decrease your 2015 taxable profit from your business. Come January 1st, it is too late.

 

Here is an annual list of “Seven Strategies” from Bell Springs, publisher of Small Time Operator, Write It Off! Deduct It!, and 475 Tax Deductions for Business, that can save you a bundle on your 2015 taxes:

 

Strategy #1. Pay all of your bills, including January’s monthly bills, in December and get a tax write-off in December. Expenses are deducted the year paid (cash basis taxpayers; some exceptions). However, if you do not need an extra deduction this year, if your profit and taxes are going to be very low for 2015, hold off paying bills until January. You will get the deduction next year when it will help you save on next year’s taxes.

 

Strategy #2. Buy office equipment—a new computer, copier, office furniture—before December 31st, and write off the entire cost this year. This is as long as total purchases for the year are less than the first-year write off maximum of $25,000. Or if you do not need an extra deduction this year, delay major purchases until 2016 and get the deduction next year.

 

Strategy #3. Stock up on, and pay for, business and computer supplies, stationery and other consumables, and write off the entire expense in the current year.

 

Strategy #4. Pay your 2016 service contracts, Internet fees or similar recurring charges by December 31, and write off the entire amount in 2015.

 

Strategy #5. Make and pay for needed repairs to your office and equipment in December and get a full deduction this year.

 

Strategy #6. Wait until January to bill your customers for December’s work. Income is taxed the year received (cash basis taxpayers).

 

Strategy #7. Hire your children to work in your business over the holidays. If they are under 18, you can pay each of them up to $6,200 a year, write the wage off as a business expense, and the children owe no income or payroll taxes. There are many limits and requirements to this law, but it can be a significant tax savings for you, and a fun opportunity for your kids.

 

These are just a few of the bigger and better known year-end tax strategies. For more strategies, deductions, and tax-saving tips, treat yourself to a copy of Bell Springs’ best-selling guidebooks Small Time Operator, Write It Off! Deduct It!, and 475 Tax Deductions for Business. We think you will find these guidebooks to be a most worthwhile investment. Learn more about them on our web site www.BellSprings.com.

 

The above was taken from Bell Springs annual update and used with permission. I have been a long-time fan of all these books and use them every year. Let me know how time blocking works for you. I would love to know, just leave a comment below or go over to the ICAP Facebook or Google+ pages and leave a comment there.

 

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Morna McEver is the founder and CEO of the International Association of Creative Arts Professionals where creative arts entrepreneurs craft business success. Her weekly e-zine offers tips, techniques and inspiration to help you craft business success from your creative arts passion. You can sign up for a FREE subscription at http://www.creativeartsprofessional.com.

 

WANT TO SEE MORE ARTICLE LIKE THIS?

See the ICAP blog at http://www.creativeartsprofessionals.com/weblog/

 

7 Tax Tips for Creative Entrepreneurs

Wednesday, March 27th, 2013

Tax TimeYes, it’s tax time again. As a self-employed business owner, it’s important for me to have a handle on my business and know what is deductible and what isn’t. Invariably when I talk about taxes with creative entrepreneurs, someone will tell me they have an accountant. “Terrific,” I say. “But what does she know about your business in particular?” You go to an accountant because she knows taxes. She can be very knowledgeable about small businesses, but she cannot know the nuances of every type of small business. She works with what you give her. That’s why it’s important for you to do your own research, understand tax strategies and keep track of deductions to which you are entitled. Here are some tips for maximizing those deductions.

1. Keep better track of your mileage. I’ve read that when you estimate, you actually underestimate. I use the Quilt Engagement Calendar in conjunction with the trip meter in my car. I set the meter to zero at the start of my trip and then enter the mileage in the calendar at the end, along with a notation as to the purpose of the trip. The IRS doesn’t care how you track your mileage, just that you have written logs. You can also track your public transportation costs in the same log.

2. Group your errands. The IRS allows business owners to deduct business mileage. For 2012, the rate was 55.5 cents per mile. (For 2013, the rate is 56.5 cents.) If you have personal errands, do them at the same time as your business errands.

3. Use the per diem rates for meals. The IRS has established per diem, or by the day, allowances for meals that self-employed individuals can use. At your option you can use either the per diem or actual costs, depending on which gives you the greater deduction. I find that in most cases, the per diem is better. Remember, that you can only deduct 50% of the per diem or actual meal costs. For per diem rates, refer to IRS Publication 1542, Per Diem Rates.

4. If you operate as a sole proprietorship, consider hiring your children aged 18 and under. You can get a deduction for their wages (up to $5,950 in 2012), and in most cases your children do not have to pay taxes on the wages. Details: IRS Publication 15, “Circular E, Employer’s Tax Guide.

5. It may not be too late to set up a retirement plan for yourself to shelter some of your income. Talk to your accountant about your options.

6. Don’t forget about professional publications and dues. All the quilt and many other magazines that you buy are deducible if you use them in your business. Your IAPQ dues are also deductible, as is your trip to the Creative Arts Business Summit.

7. And, if your books weren’t up-to-date or you are a shoebox records filer, vow to be better in 2013.

For more information, you can refer to IRS Publication 334, Tax Guide for Small Business. Also recommended is 475 Tax Deductions for Businesses and Self-Employed Individuals by Bernard Kamaroff, CPA.

Please share your favorite tax tip by leaving a reply below.

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