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While we are the authoritative force in Employment and Labor Law today, we also endeavor to educate and enlighten you on a myriad of other issues that are beneficial to you or your business. Accordingly, this blog introduces you to a new video titled “6 Tips To Maximize Tax Credits!” and which is accessible through the link provided at the end.
A common rule of any business is that whenever you are spending money on your employee on behalf of the business, you would want to maximize your tax credits and deductions and maximize the value you get from the same. Let us consider the following perfect example to understand what we mean here. Assume that you are taking a client out to dinner for your business or company out for dinner or some other treat, the last thing you want to do is to let them pay a dinner bill for like a $1000 dollars because it is assumed that each of you has a 50% meal rule. Because you may want to avoid that, you would want to maximize your tax credit, as well as maximize your ability to deduct from the first layer of your taxes, simply because it means more money in your pocket as a business.
Why is this important? By way of backdrop, we found it necessary to create this video as a way of providing employers with tips that would help them to stay at the top of their game, particularly regarding how to maximize tax credits and value of money for their businesses. Note that these tips derive from a sum up of publication 529 & publication 463 of the Internal Revenue Service (IRS).
Without further ado, let us hammer on the six tips we have prepared for you.
- Ordinary and Necessary Business Expenses Permitted. First and foremost, you enjoy a lot of discretion as a business, which is why you should consider this tip. Apparently, you can deduct off the top any expense that is ordinarily necessary of the business.
- Make use of “Pre-Approved” Expense Examples. The IRS has a pre-approved list of expenses that you must consider. Examples include required work clothes & uniforms, supplies & tools used (e.g. computers, desktops, keyboards, pens, and pencils), business use of your vehicle (wear and tear factors), business use from wherever location you are in (e.g. when you have your business at your home), and work-related education.
- Use Existing Forms. As an employer, you should make use of the IRS forms that contain all this information. All these forms are freely accessible online. For instance, form 2106, the business expense form from the IRS, highlights all the categories of businesses. Most likely, your business will fit in one of those categories, which means that you can enjoy its provisions.
- Underutilized Categories (Such As Educator Expenses). It would also be wise to consider underutilized categories of expenses, such as education expenses and educate tour (YOUR) expenses, which are very critical. For instance, if you conduct employee training, you could double down your expenses by filing them as an Educator Expense or as regular, standard business expenses.
- Always Keep Records. No one can undermine the importance of keeping appropriate and up-to-date records. A good accountant knows how to set records in a certain FASHION so as not to raise any red flags whatever the case is. However, as an employer, you should be responsible with your records. File all the receipts of your expenses and purchases. Print and file payment-confirmation emails as well.
- Take Advantage of Free Filings! The largest percentage of IRS filings are free of charge, which means that you should take advantage of the same. Again, if you are fortunate as a business to have your own dedicated tax official who works internally, then you are in the best position to save a lot of money in the long-run. This is because, whereas the IRS allows you to file for free, tax filings cost a fortune in activities such as annual handling and many more.
With these six tips, you can be sure that you will manage to maximize you tax credit expenses for your business. We invite you to review our video at https://www.youtube.com/watch?v=l5VIgQo3Jak
Stay tuned for our next installment and strive to be #UnusuallyMotivated. In the interim, please reach out to us with questions and/or comments at the Contact Us page!
Always rising above the bar,
Legal Writer & Author.