by Danielle Higley
Depending on your industry, workflows, or a thousand other factors, your business may be leaving tax savings on the table. That’s why it’s so important to have a good accountant or bookkeeper on speed dial around tax time. You never know what sort of credits or deductions you might qualify for until someone tells you.
While you wait for their return call, here are five tax tips many retailers find helpful. They might give you some food for thought while you put together this years’ tax plan.
Get Money Back for Hiring a Diverse Team
There are many reasons to hire a diverse team, including tax deductions. The federal government offers the Work Opportunity Tax Credit to tempt employers into hiring workers from qualifying groups. These include veterans, ex-felons, people with disabilities, and others.
“The maximum tax credit ranges from $1,200 to $9,600, depending on the employee hired and the length of employment,” according to the IRS. Should you hire an individual with compromised mobility, you may also get a tax credit for modifying your business’s infrastructure to accommodate. The Architectural Barrier Removal Tax Deduction allows employers to claim a deduction of up to $15,000 a year for qualified expenses.
Get Credit for Insuring Your Employees
If you have a small team (25 full-time employees or fewer), each making less than $50,000 a year, you could qualify for a tax credit. “The amount of the credit you receive works on a sliding scale,” says one IRS resource. “The smaller the employer, the bigger the credit. So if you have more than 10 full-time equivalent employees or if the average wage is more than $25,000 (as adjusted for inflation), the amount of the credit you receive will be less.” Qualifying employers may have up to 50 percent of their premiums paid, or up to 35 percent if they are tax-exempt.
Deduct That Home Office
Whether you have a storefront or an online space, chances are good you’ve got a home office ripe for writing off. The trick is to make sure it’s not a space used for any other purpose. For example, your office can’t also be your bedroom (unfortunate for all those living the studio apartment life). Using square footage, deduct whatever percent of your home you dedicate to work. In other words, if your office is 10 percent of your home’s square footage, divide your yearly payments by 10 and write off that amount. Alternatively, take your office’s total square footage and multiply that number by $5 (up to 300 square feet).
Write Off Your Everyday Tools
It’s easy to forget just how big your business really is or how many tools you need to make it run. This tax time, don’t forget to write off things like the internet, phone bills, and even a percentage of your home’s gas or electricity if you have a home office. And don’t forget the tangible items too. Any equipment you buy for your business is deductible, from computer monitors to post-it notes, so long as you have your receipt.
Submit Your Vehicle Expenses
Depending on the type of retail you do, you may spend a lot of time behind the wheel. Say you’re a florist, but the van you use to make deliveries is also the van you use to take your kids to soccer practice. There are two ways you can try to manage vehicle expenses for tax write-offs. The first is to keep track of every expense, from gas to new tires to oil changes. Then, when you’re ready to file, deduct a percentage of those costs based on how much you use the vehicle for work. If that’s too much to think about, the second option is to keep track of “standard mileage.” The new 2017 rules allow business owners to deduct 57.5 cents per mile they travel for work.
For most business owners, there’s little to love about tax time. Getting everything in order and submitting it all correctly is a chore no retailer looks forward to. But if there’s a silver lining in filing taxes, it’s those credits and deductions. With a little research and some help from your tax professional, you may be able to save your business money for years to come.
Danielle Higley is a copywriter for TSheets by QuickBooks, a time tracking and scheduling solution. She’s been a contributor to MSN.com, FiveThirtyEight, and a variety of HR and business blogs where she can put her affinity for long-form storytelling to best use.