Save Thousands in 2021 — With these Tax Strategies

  1. Business Checking Account — Be sure to set up a separate checking and/or credit card for your business expenses. This account can just be in your name, but should be a different account than what you use for personal expenses. Use these accounts for anything you think may be a deduction based on our conversation and the information that has been provided. This will allow your accountant to do your books more efficiently and for less.
  2. Medical Insurance — Your medical insurance can only be taken as a deduction if you have a positive net profit for your business (net profit is revenue minus all of your business expenses). If that looks unlikely for your business this year and you are married or have children working in your business you can still save big with a taxed advantaged HSA account. Please feel free to contact us for more details. Contact Us
  3. Business Use of Home — Your business use of home can only be taken as a deduction if you have a positive net profit for your business. If it looks unlikely you will have a positive net income from your business this year we recommend you use the Augusta Strategy. Simply hold necessary business meetings at your home and rent out the space as your business from yourself. Be sure to rent out for the price it would cost to rent such a space and hold such a meeting. Call around to different places in the area and have them email you a quote. Please let us know if you use this strategy by the end of the tax year, so we can make sure all the supporting documentation is in place when you file your taxes. Augusta Strategy Details
  4. Preplanning Trips and Engagements — For business trips and engagements it is best to plan and set up meetings and actions related to business on the business trips ahead of time. Take records of these meetings and planned business actions before leaving on the trip.
  • Not Good — Going on a trip and handing out business cards at random places along the trip and trying to write off the trip.
  • Ok — Planning ahead of time to go to a specific event and hand out business cards.
  • Best — Planning a specific meeting ahead of the trip and documenting this meeting ahead of time. Contact a person or business in the area you are traveling that will help your business.
  • Automotive — If you buy an automobile this year for business use, please let us know.
  • Meals — You can deduct business meals. Please plan the business purpose and name of guests ahead of time and keep a record of this.
  • Miles — You can write off the miles that you drive for your business. If you are driving for personal use, but stop to do business along the way, that can be considered a business trip. Use MileIQ to track your miles. You can track your miles for 90 days and then multiply by 4 to get your business mile use for the year, but you must be driving about the same every quarter. This is the most common audit, so it is important to keep records of this.
  • Cell Phone and Internet
  • Travel — Set up your business plans before your trip. Keep records of meetings and business actions planned ahead of time.
  • Hire Your Kids
  • Office Supplies
  • Continuing Education / Training / Personal Development — Education needs to be related to your business. Can not be for a licence, like a plumbers licence. Personal Development nearly always counts as long as you believe the training will lead to income now or in the future. Business coaches and consultants also count.
  • Tax Preparation / Professional Services — Your tax preparation and professional services like legal for your business are deductible.

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HBB Accounting

HBB Accounting

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We are an accounting firm that specializes in people with part time and small businesses. We make sure our clients save the maximum amount they can.