These days, businesses face a number of expenses that they might not have expected to pay. From accounting support to travel and entertainment costs, these extra expenses can sometimes sneak up on you. Here’s how to make sure that your business isn’t caught off guard when it comes time for your taxes:
Tax prep fees
Tax prep fees are a business expense and can be deducted from your business income. You may even be able to get a tax refund, which you can use to pay off debt or invest in your business.
If you need help figuring out how much money you should be paying in taxes each year, consider hiring an accountant or financial planner who specializes in taxes. These professionals can help ensure that you’re getting all of the deductions and credits available for small businesses like yours so that when tax season rolls around next year–and every year after that–you’re ready!
Travel and entertainment costs
Travel and entertainment costs are tax deductible, but only if you keep track of them. You can deduct the cost of transportation, meals and entertainment so long as they’re related to your business. For example: If you’re traveling on business and stopping at a restaurant for dinner with clients or colleagues, then the entire cost of that meal is a legitimate deduction.
On the other hand, if you flew home to see family members over Thanksgiving weekend (even though they live in town), then only part of your airfare qualifies as a deduction–the amount directly related to doing business on this trip will be deductible; any personal expenses are not allowed under IRS rules.
Legal fees
Legal fees can be one of the most expensive expenses for a small business. You need to make sure that you are getting the right advice, following the law and protecting your business.
- Make sure you’re getting good advice: The legal field is full of professionals who want to help, but not all are created equal. Don’t assume that just because someone has an impressive title or degree they know what they’re doing–and don’t feel bad about asking lots of questions before hiring someone!
- Check out their track record: Ask for references from past clients; look up reviews online; talk with other lawyers in your area who may have worked with them before (some might even offer free consultations). This will give you insight into how experienced they are at working with small businesses like yours–and whether they have any specialties that would be helpful in this situation.
- Stay within budget: Under no circumstances should anyone ever spend more money than necessary on legal services! If something seems too good/cheap/fast then there’s probably something fishy going on…
Professional services contracts
- Make sure you understand the terms of the contract.
- Make sure you have a contract that you can enforce.
- Make sure it’s not overly broad (for example, if someone says they’ll “do whatever they can” to help you out and then doesn’t deliver, would this be considered breach of contract?) or overly restrictive (for example, if a company requires that all communications be written in Japanese).
Accounting support and consulting fees
Accounting support and consulting fees are necessary. It’s not enough to just hire an accountant; you also need to find a good one, who can help you navigate the many complex tax laws that apply to your business. Accounting firms will charge anywhere from $100 per hour up into the thousands of dollars per hour for experienced professionals, so it is important that you have a clear understanding of what services they will provide before entering into any agreement with them.
If your business needs more than basic bookkeeping services and tax preparation (and unless it doesn’t), then it may be worthwhile looking into hiring a consultant as well–someone with expertise in specific industries or sectors whose job it is to advise clients on how best to run their businesses according to current trends in their field or industry segmentation.
Accounting software
Accounting software is a great tool to use for keeping track of your business expenses. There are many different types of accounting software, but most will allow you to keep track of all the different types of expenses that come up in running your business. Some examples include:
- Online accounting programs like Quickbooks and Xero
- Cloud-based apps like Freshbooks or Wave (formerly Wave Accounting)
Make sure to keep track of these expenses.
It’s important to keep track of all your business expenses, so you can deduct them on your taxes.
- Keep receipts and other documentation for each expense. This includes credit card statements and cancelled checks. If a business-related meal or entertainment expense was charged on your personal credit card, save the receipt showing that it was for business purposes (and not personal).
- Keep track of mileage driven for work-related travel by keeping a logbook in which you record each trip’s date, destination(s), miles driven and the reason why it was taken (business vs personal). You may also want to use some type of mobile app or website like TripIt!that automatically keeps track of these things for you based on emails from travel agencies like Expedia or Orbitz..
- Keep track of professional services contracts such as those with lawyers ($$$)
The bottom line is that you need to be aware of these expenses, and make sure they’re being tracked in your accounting software. By doing so, you can ensure that your business remains profitable and on track for success.
