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7 Tax Saving Strategies for Small and Home-Based Businesses, Start-Ups and Solopreneurs

money2.With approximately one-third of taxpayers purported to wait until the last 30 days leading up to filing deadline, there is egregious opportunity loss with respect to potential tax savings were strategy to be employed all year through. Sadly, many small and home-based business owners, solopreneurs and start-up owners are serial “late filers” and miss out on maximizing tax benefits that are unique to their type of business structure. In fact, most have no idea there are tax professionals that exclusively focus on strategy for this niche who can help these entrepreneurs realize tremendous tax advantages.

With this in mind, Meisa Bonelli, Managing Partner of Millennial Tax—the leading provider of tax services for small/home-based businesses, start-ups and solopreneurs, offers the following 7 tax saving strategies this type of business owner should heed:

1) Choose the Right Entity for Your Business

Per the Global Entrepreneur Monitor Report, 69% of all start-ups in the United States are home-based businesses and 59% of established businesses more than three and a half years old continue to operate as home-based businesses. If you’ve decided to start a business or maybe you have been running one for a while, then become official. Let your county, state, and the federal government know that you’re in business by registering your business within your state under the entity type that best suits your business goals. Remember, there isn’t a one-size fits all for home-based businesses, so make sure to consult with your tax professional or an attorney about the best business entity for you.

2) Audit Proof Your Business

Audit proofing your business means more than just saving your receipts. Depending on the type of home-based business you operate, you may need to keep calendars, mileage, and personal use logs. All home-based businesses aren’t created equal, so speak with your tax professional about what you can do to make your business in particular tax compliant.

3) Get a Home Based-Business Tax Professional

If you would go to an optometrist for your eyes and a podiatrist for your feet, why wouldn’t you seek out a tax professional that understands the intricacies of your type of business? Choosing a specialized tax professional can save you thousands of dollars (in missed deductions) and time (trying to learn pertinent IRS regulations). Do-It-Yourself software can’t do it all and software is only as good as the person using it. If you’re in business, leave maximizing your savings to professionals that can help you.

4) Get a Second Look

In 2012 (for the 2011 filing year), nearly a quarter of a million individual business returns not claiming the Earned Income Tax Credit (excluding farm returns) were examined by the IRS and assessed additional taxes to pay after review. Many tax professionals offer complimentary consultations regarding their services and will take a look at your prior year’s returns. If the IRS is going to make sure they don’t miss a dime, then you should make sure you don’t miss a deduction.

5) Tax Planning is Year-Round

If your business isn’t seasonal, then you need a year round tax plan, strategy, and procedures not to mention a professional that’s available. When you have a simple tax situation, it is okay to check on your taxes once a year if not much has changed in a year (e.g. purchasing a home). However, if you’re running a business, the tax implications of your business’ decisions are a 365-day consideration.

6) Start a Retirement Plan

The government makes it very advantageous for home-based business owners and solopreneurs to save for retirement. Even if you’re just starting out, planning for your future is one of the best savings strategies. Take full advantage of the plan that best suits you and your long-term goals.

7) Have Integrity

It’s not a deduction you’ll find in an IRS publication, but running your business on the up-and-up is good for your bottom-line. Tax fines and penalties for not running your home-based business like a real business are stiff! Seek out the information you need to operate a successful home-based business and consistently follow the appropriate rules and regulations.

Sources:
[1]http://smallbiztrends.com/2013/07/home-based-businesses-startup.html
[1] Internal Revenue Service Data Book, 2012, “Examination Coverage: Recommended and Average Recommended Additional Tax After Examination by Type and Size of Return, Fiscal Year 2012” – Page 22

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About the Expert:
Meisa Bonelli, a Wall Street finance and tax professional, business match-maker, and mentor, is the President of Millennial Ventures and Managing Partner of Millennial Tax (www.MillennialTax.com)—the leading provider of tax preparation and strategic business planning to home-based business owners and solopreneurs, exclusively Understanding that these types of professionals need a highly specialized tax strategy to grow their businesses, and as a serialpreneur herself, Bonelli founded Millennial Tax as a source of accurate tax information and best practices to the 38 million home-based businesses operating in the United States that are a key aspect of the American economy at large.

Bonelli educates both new and seasoned home-based business professionals and solopreneurs on the importance of understanding the myriad of tax deductions they’re entitled to and how these deductions can help propel their business growth. Also core to Bonelli’s work is community financial-literacy outreach through which she offers pro bono tax advice to those seeking to understand how they can legally, morally and ethically maximize tax savings and build wealth. In addition, leveraging a vast network of professionals, Bonelli also connects home-based business owners and solopreneurs to resources that understand their business model and industry. The underpinnings of Bonelli’s well-rounded perspective are her versed background in private equity, real estate, business strategy and taxation.

For all of her professional endeavors, Bonelli’s business mentoring style, while piquant and candid, is refreshing and unorthodox. Cultivating empowerment through messages of inspiration and vital feedback, Bonelli supports clients in reaching their maximum potential in both business practices and relationships. Encouraging clients through identifying their vision and strategizing a plan of synergetic connection, she meets people where they are and journeys with them as a “PBI” – Partner of Best Interests. Bonelli is a firm believer that, “Being an entrepreneur is first about building yourself, second about building the business, and, third, about building others.”

Bonelli is an interdisciplinary professional who graduated from John Jay College in New York City, and she is currently working toward a double Master’s degree at New York University focusing on Strategy & Leadership and Organizational Effectiveness. Bonelli also studies taxation in an ongoing capacity through the National Association of Tax Professionals. She is a member of the National Association of Tax Professionals and is also affiliated with the Greater New York Chamber of Commerce, Toastmasters International, among others. Bonelli resides in Manhattan, New York.

 

About the Author

New York Trend is a weekly news publication that focuses on issues and lifestyles of the African & Caribbean American communities throughout the New York metropolitan area and Nassau and Suffolk Counties of Long Island. It is a respected and well recognized news publication that has been in existence since 1989. Owner, Publisher and Executive Director, Dr. Teresa Taylor Williams has been at the helm of this award-winning publication since its inception. New York Trend continues to be the only black woman-owned, metropolitan newspaper in New York and Long island. New York Trend is the largest black-owned newspaper throughout Nassau and Suffolk counties.

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