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5 Important Ways to Save on Your
2014 Business Taxes

As a small-business owner, you’re keenly aware that every dollar counts. That’s why it’s worth the effort to explore every tax-saving opportunity Uncle Sam offers.

The deadline for filing your 2014 business tax return is drawing near. Are you aware of the top deductions and credits for small businesses? It could mean the difference between a hefty tax bill that leaves you reeling and one that’s within reach. These tax-friendly tactics include:

1. Gather up your office expenses

Assuming you’ve saved receipts and kept detailed records, you can claim the “ordinary and necessary” expenses to run your business, such as new equipment, technology, software and even furniture. Under Section 179 of the Internal Revenue Code, you can write off up to $25,000 in qualified business expenses. If Congress passes proposed legislation, however, this amount could climb to $500,000 — a threshold available in previous tax years. In case you need to provide documentation to the IRS, be sure your records include the specific item, the purchase price and the date you put the item in service.

2. Give to charity

Charitable donations of money, supplies, services and other items may be tax-deductible. Before you proceed, check that the charity is eligible — usually a 501(c)(3) — and that donations are covered under the latest IRS guidelines. Also, the IRS requires written acknowledgment from the donor for any contributions valued at $250 or more.

3. Move ahead with the mileage expense deduction

This is a commonly overlooked, but easy to take, deduction. If you use your car or other vehicle for business purposes, you can deduct a certain amount based on mileage. Updated by the IRS each year, the standard mileage rate for tax year 2014 is 56 cents a mile. (So if you drove 5,000 business miles in 2014, your deduction would be $2,800.) Another option is to deduct a portion of your actual expenses, such as gas, oil changes and repairs; just total the expenses and multiply that by the percentage the car was used for business (50 percent, for example).

4. Get smart about educational expenses

As a small-business owner, you should be committed to staying current and relevant in your particular industry. If that involves classes, seminars, workshops and conventions to maintain or enhance the skills required for employment, you may be entitled to a tax deduction.

5. Check up on the healthcare tax credit

Unlike deductions that reduce the amount of income subject to tax, credits are applied directly to your tax bill to reduce what you pay. Under the Affordable Care Act (ACA), you may qualify for a credit of up to 50 percent of your premium costs if you have fewer than 25 employees with an average salary of $50,000 or less, and your business is enrolled in a qualified health plan through the Small Business Health Options Program (SHOP) Marketplace.

Remember: 2014 1099 Forms Are Now Available!

We recently cleared all unfiled 2013 forms from the site to make way for the new 2014 forms. If you have independent contractors who completed their work and received payments for the 2014 tax year, you can take advantage of early 1099 filing. Rather than wait until January 2015, beat the rush and e-file forms now.
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