Don’t Mess With Taxes: Small-Business Owners Need To Keep On Top Of Finances

Entrepreneurs start their own businesses for a number of reasons, but usually, chief among them is the goal to make money.

So when sales start flowing and business is good, entrepreneurs are happy.

Want to know what makes them unhappy? Getting in between them and their money.

Alas, Income.com followers, we all have to pay taxes, and despite entrepreneurs’ reluctance to part with their hard-earned dough, small-business owners have to pay up. The key to keeping more or your money is understanding taxes, and according to a recent survey, not many entrepreneurs do.

A Xero poll of accountants who serve small businesses found that among the common gripes with entrepreneurial tax preparation accountants voiced, insufficient record keeping and not preparing a budget for the year ahead were at the top of the list.

Another way small-business owners are screwing the pooch when it comes to taxes? Not taking advantage of write-off opportunities. Here are four areas where small businesses can save:

Negating Five-Finger Discounts

It’s one thing to accrue business debt by making bad investments, which aren’t deductible, and a completely different animal when a firm racks up debt because of negligent customers and sticky-fingered ne’er-do-wells.

Luckily, the U.S. Internal Revenue Service allows entrepreneurs to write off the value of goods that were either stolen or not paid for. However, service-providing businesses are not able to write off unpaid accounts because you cannot place a monetary value on time and labor.

Save From The Sofa

If you work from a home office, there’s a way you can save money. The IRS allows entrepreneurs to deduct expenses related to maintaining a home office. Better news? The complicated process to do so is getting a much-needed makeover in the form of a single equation used to find the value of the deduction, which replaces a 43-line document that requires hours of paperwork.

Fido Comes In Handy

According to Fox Small Business, there’s even a way to write off the costs of keeping a dog for business purposes, like if you need a slobbery canine to protect your warehouse after hours.

Steven Aldrich, CEO of an accounting software firm, told the news source entrepreneurs can deduct food, shelter, medicine and anything else related to dog upkeep.

Mileage Matters

Considering the price of gas nowadays, entrepreneurs must be thrilled to know there’s a way to save when you’re in the car on business. Under the 2013 standard mileage rates set out by the IRS, entrepreneurs can deduct 56.5 cents for every business mile driven.

Income.com knows small-business owners often run into trouble with taxes, but you can keep more of your money by just being aware of avenues for deduction. Whether it’s lost items or late accounts, use of a home office, a guard dog or driving for the sake of the business, know where you can save – there’s tons more.