Tax Savvy for Small Business is a clear and handy guide to many aspects of small business taxation. If you own a business, I recommend you leaf through it and then sit down and read the sections relevant to your business. It is not a guide to doing your own business taxes; instead this book tells you about everything else you need to decide before your tax return is prepared.
Let’s face it, most financial decisions in your business have tax consequences, If you can have those consequences in your mind when making day-today choices on spending, hiring, business structure, office space, etc, then you will be way ahead of the game come tax time. Your accountant will be happier and you will get much more out of the the time and money you spend there.
If you’re just starting out or if your accountant never sat down and explained how and what to deduct, then read the “Basics” section first. Learn the ins-and-outs of deductions and depreciation. Buying things is essential for most businesses to run and whether you lease or buy, and when and where you take the deduction makes a difference to your bottom line. I cannot over-emphasize the importance of keeping good records; if you do not know what you spent, you cannot deduct it!
The next most important thing to business taxes is the structure of your business. While most of us start out as a sole proprietor or a partnership, there are good reasons to move up the evolutionary ladder and get a bit more formal. Each form of business — sole prop, C corporations, S Corporations, partnerships, LLC, and personal service corporations — are examined along with the good and bad news about each one.
One reason that small businesses are called the “poor man’s tax shelter” is fringe benefits. The benefits available to you will depend on the business structure that you choose, but they can be financially significant. Read up on them in this book and see if they make it worthwhile to set up a nice tax-advantaged retirement plan, dependent care plan or other snazzy tax deduction. Your favorite tax professional can help you with the nuts and bolts of these types of plans.
Now business is not all deductions and conventions in Waikiki – sometimes you have to deal with the IRS. There are great tips in this book on how to handle these types of situations. I would never say meet the bogeyman by yourself – but reading this section will make you a more informed participant so you can help your tax pro do the best job for you.
There are several other sections and chapters I haven’t even mentioned but I think that you can see for yourself that this is an excellent book for any business owner, especially as it has been updated in late 2010.