As the calendar turns over to a new year, updating your business tax planning will give you a head start on saving tax dollars. Here are three areas to review.
- Vehicle records. As a general rule, you have two choices for deducting business auto expenses. You can use the standard mileage rate or the actual cost method. Whichever you choose, the “strict substantiation” rules make recordkeeping a must to claim a deduction for vehicle expenses.
Set up an auto log and make the first entry your beginning-of-the-year odometer reading.
- Retirement options. If you haven’t already established a retirement plan, give us a call. We’ll review your options and help you decide which plan is best for you. For example, a Simplified Employee Pension plan, generally referred to as a SEP, can be established by any size business and has no federal tax filing requirement. For 2015 you can contribute up to $53,000 to a SEP plan.
If you already have a retirement plan in place, make sure the documents are current. Keeping up with tax law changes is crucial to maintaining your tax deductions.
- Penalty exposure. Review your health insurance plan to make sure you’re in compliance with the requirements for offering health coverage to employees. Penalties under the health care laws are typically based on the number of workers you employ.
Take time to verify you’re following the rules for determining whether workers are truly independent contractors.