By Sobia Azam
Dec 13, 2018
Posted in Tax Software Hosting
Only two weeks are left in the year 2018 and small business owners are running out of time to implement tax saving strategies for the year. As we get busy in enjoying the festivities, the year-end also means the end of opportunities for tax planning.
Savings are essential, even more so for startups or small businesses with a tight budget. Also, there have been plenty of changes in the income tax brackets and regulations by the IRS in the last couple of years. With the Tax Cuts and Jobs Act coming into effect in January 2018, it has been an engaging year for taxpayers.
It is overwhelming to absorb so many new things before the year closes, which is why you shouldn’t be doing this alone. Talk to an expert to guide you in the right direction before the time runs out.
For a successful tax preparation that ensures maximum precision and accuracy, use the cloud technology for tax software hosting and provide an encrypted platform for your application. Cloud hosted applications are secure, with the benefit of remote access through the internet.
Below are a few year-end prospects to look out for.
You can think of this as a very strategic gift that the small business owners received from all the recent changes in tax policies. A 20 percent qualified business income deduction, can be thought of as a break for pass-through entities, S-corporations, and sole proprietorships.
This seems attractive, but it is a whole another job to get qualified for the deduction. So obviously accountants and tax professionals geared up their creativity to map out strategies that will help entrepreneurs qualify. Keeping in mind the limitations:
Tax professionals responded with strategies, but the IRS issued a warning against some this summer, which has rendered a level of uncertainty over establishing the qualification. Particularly with real estate, there are still doubts over defining the business or transaction in the context of the legislation.
These are sensitive matters, but the opportunity is huge. As experts say, a lot of people will want to take advantage of it.
With the implementation of the Tax Cuts and Jobs Act in January 2018, deductions on official meals and entertainment, that business owners take to woo clients, have been cut down. Earlier employers could claim deductions on 50 percent of the cost of meals and tickets to sporting events.
But now, entertainment cost is no longer deductible. Also, you can deduct 50 percent of the cost of meals where you or your employee is present with a (prospective) client, and the meal isn’t lavish. And make sure your game tickets are in a separate bill from the meal you had at the stadium with your client.
This strategy can be called as basic as things could get; contribute to your retirement plan and reduce your taxable income. Self-employed people can take full advantage of their SEP IRA and put away up to 25 percent of their income ($55,000 in 2018) from self-employment to retirement savings. But keep in mind your business’ net profit and self-employment taxes that are to be paid. Which is why it is safe to consult an expert before going through with a new strategy for filing taxes.
With an overhaul in tax policies, it is crucial to talk to an experienced tax advisor. Most businesses have a consultation only during the tax season, which might not be healthy for your business. There must be regular meetings between a tax advisor and their client to discuss the company’s future and growth. Major tax savings can only happen if your tax advisor is passionate and thorough.
Savings also depend upon the tax preparation software being used. For a stress-free and secure tax filing, use tax software hosting services. When integrated with the cloud, the tax application offers enhanced features and benefits that are sure to make your tax filing a smooth process.
Stay on top of your business operations with cloud hosting services by Sagenext. We offer accounting and tax software hosting solutions for leading applications like QuickBooks (all versions and editions), Sage (all versions and editions), Drake, Lacerte, ProSeries, UltraTax CS, and TaxWise.
By Ayushi Jain Date : Jan 17, 2019
By Sobia Azam Date : Jan 14, 2019