Friday, February 21, 2014

Five things every small business owner needs to know about filing taxes this year / A free version of Deductr, a web-based service and mobile app that helps small businesses owners track their business expenses, is coming on March 1,


Here are five things small business owners need to know:

1 Your home office deduction's way easier now. Forget the complicated calculation you used to do. This year small business owners have the option to deduct a standard amount: $5 per square foot of the space in their home allocated to their business up to 300 square feet, for as much as $1,500. That means if your home office is 200 square feet, you can deduct $1,000.
"It's a major, major benefit for small businesses," Keith Hall, national tax advisor for the National Association for the Self-Employed, a nonprofit that represents microbusinesses with five employees or less, told the Daily News. You still have the option of using the more complicated calculation to see if you are entitled to a bigger deduction.

2 You can deduct more of your mileage. The standard mileage rate was upped slightly to 56.5 cents per mile for 2013 from 55 cents in 2012.
"It's one of those deductions that is easy for small business owners to miss," Hall said.

3 Tax rates are going up for big earners. Those in high income brackets will see higher rates for federal income tax, Social Security tax, capital gains tax, self- employment tax, as well as a new tax on net investment income.

4 You can sock away more in your retirement account to get a tax deduction for 2013 and you still have time to do so. The limits for contributions to qualified retirement plans such as 401(k)s, IRAs and SEPs (Simplified Employee Pension Plans) have been increased for most taxpayers. "Make sure you review your options," Hall said. "Put away as much as you can."
If you have a SEP, you can deduct up to 20% of the net earnings of your business, up to $51,000 for 2013.

5 Free help for tracking business expenses is on the way. A free version of Deductr, a web-based service and mobile app that helps small businesses owners track their business expenses, is coming on March 1, the company's CEO John Thomas told the News.
In addition to tracking expenses, the app also shows business owners how much they are saving on their taxes. "Deductr builds a profile," Thomas said. "As you provide it with your tax information, it will give you feedback on your tax savings."

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