Tax knowledge for business success

1. Tax knowledge for business success The accounting world is full of complex tax laws governing various accounting outsourcing. Many small business owners, do not understand the tax code, which makes for a frustrating tax season. When the clients are educated, tax season becomes less confusing and accountants are able to finish the paperwork more quickly. The article reflects 10 basic tax details that all business owners should be familiar with. Tax credit for charitable donations Owners of small scale businesses should know how charitable contributions align with the values and goals of their business. Businesses should make sure that the charity is an eligible contribution with the help of IRS's Section 501(c) (3) search tool.

2. The law has stringent documentation requirements, and requires a business to always receive a receipt for such contributions. Deductions for business corporations and partnerships are passed to the owners on a K-1 form. Generally, the individual limit on the deduction for an individual year is 50 percent of the adjusted gross income. Health-incentives Wellness incentives are deductible. Incentives are taxable to employees unless they are employer-sponsored health benefits. Health benefits include blood pressure screenings, vaccinations, and other costs to diagnose, treat, or prevent diseases. Other benefits, such as gym membership reimbursements, are taxable since they are not considered to be a medical care expense. Bonuses Bonuses are deductible by business and are taxable to employees. The bonus is added to the regular payroll amount and the standard withholding tax tables are used on the total amount. Usually a flat rate of 25% is used. Deductions for personal vehicles used for business purposes Employees who use personal vehicles for business purposes can use the standard mileage rate to calculate deductions. The standard mileage rate is $0.58 per mile for 2019. Expenses can include gas, oil changes, vehicle repairs, and insurance of the vehicle. When an employee is subject to minimum tax, there is no deduction for miscellaneous itemized deductions. In lieu of personal deductions of business expenses for vehicle use, employees may obtain reimbursements up to $0.58 per mile for business related miles. This reimbursement is not taxable to employees.

3. High-end office equipment or inexpensive equipment The choice of equipment depends on business expectations. It may seem more financially prudent to opt for inexpensive equipment. Of course, reliability, repair, and maintenance costs- particularly with customers facing equipment—must also be considered before a decision. It is advisable to use less expensive equipment from a tax perspective. Bikham Finance houses an expert team of industry’s best accountants who have the required expertise to deliver world class outsourced accounting and bookkeeping services for accountants. The team at Bikham Finance is always up to date with the latest accounting and bookkeeping services guidelines and take keen interest in delivery quality accounting outsourcing to its clients. They carry out regular evaluation of their experts to make sure the services comply with the IRS tax rules and regulations. They offer round the clock support to ensure better client satisfaction. If you are looking for the most efficient accounting outsourcing services, visit www.bikham.com and schedule a consultation soon.