Small business owners can save on taxes

If you own a small business, every dollar matters - especially when it comes to taxes. Whether your business is a partnership or corporation, Uncle Sam offers some sizeable deductions to lower your liability, allowing you to put those dollars toward capital and employees.

Easy-to-use tax preparation solutions have become an increasingly popular way for small business owners to navigate deductions and tax law changes. The programs ask simple questions about business income and expenses to help maximize your deductions. Solutions, such as the value leader TaxACT, allow you to use their online solutions for free and only require payment when you're ready to file.

TaxACT spokesperson Jessi Dolmage shares three ways to reduce your small business taxes.

Tip 1: Buy to save

Whenever buying new equipment, technology, software or even furniture for your business, save those receipts and keep detailed records that include purchase price and date placed into service. You should be able to substantiate any expenses you claim on your tax return.

The 2013 Section 179 deduction limit for new and used assets purchased is $500,000. However, your business must be profitable in order to receive this benefit in 2013. In 2014, the dollar limit drops to $25,000 unless Congress extends this tax break.

Bonus depreciation of 50 percent of the cost of new items expires at the end of 2013. Depreciation can be claimed whether or not your business is profitable.

Tip 2: Tis always the season for giving

Company donations of money, supplies and property are all deductible expenses. So are bonuses (and associated payroll taxes) awarded to your employees, partners and officers. If your business is an S Corporation, keep a close eye on officer compensation to ensure you meet IRS requirements and thus avoid penalties.

Give yourself the gift of education. Take a class or seminar or attend a convention that helps you maintain or improve skills required for your business.

Tip 3: Business is sometimes personal

If you use your home for your business, you may be able to deduct mortgage interest, insurance, utilities, repairs and depreciation.

Corporations and partnerships can also deduct actual expenses for non-personal uses of your personal vehicle, as well as reimbursements to employees for business use of their personal vehicles. Actual expenses may include costs for fuel, maintenance and parking fees. Your detailed mileage records should include date, total miles, tolls, parking and purpose of trip. You can also deduct vehicle depreciation and loan interest.

The bottom line

Small business owners have year-round opportunities to cut their taxes. Dolmage recommends doing a dry run of your taxes with an online or download solution like TaxACT before you actually file to identify potential savings. Answer simple questions about your expenses and revenues, and the program will do the rest so you can see how moving revenue and expenses forward or back may change your taxes.

To make tax time easier, TaxACT also offers a free mobile app for organizing your tax documents throughout the year. Take a picture of receipts, statements and tax forms with TaxACT DocVault, then save up to 3 GB of digital images on TaxACT's secure servers. At tax time, import images into TaxACT to save with your 1040, 1065, 1120 or 1120S tax return.

Get more business tax tips at www.irs.gov and learn more about TaxACT Small Business solutions and TaxACT DocVault at www.taxact.com.

March 2015
S M T W T F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31

Upcoming Tax Dates

March 2All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2014.

March 2Farmers & fishermen
File your 2014 income tax return (Form 1040) and pay any tax due - Details

March 2Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2014. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2014. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms remains February 2.

March 2 Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

March 2 Wagering tax
File Form 730 and pay the tax on wagers accepted during January.

March 2 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in January.

March 10 Employees who work for tips
If you received $20 or more in tips during February, report them to your employer - Details

March 11 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of February.

March 13 Regular method taxes
Deposit the tax for the last 13 days of February.

March 16 Corporations
File a 2014 calendar year income tax return (Form 1120) and pay any tax due - Details

March 16 S Corporations
File a 2014 calendar year income tax return (Form 1120S) and pay any tax due - Details

March 16 S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2015. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2016.

March 16 Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004

March 16 Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 (2015) applies, deposit the tax for payments in February.

March 16 Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in February.

March 25 Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 14 days of February.

March 27 Regular method taxes
Deposit the tax for the first 15 days of March.

March 31 Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2014. This due date applies only if you electronically file.

March 31 Electronic filing of Forms 8027
File Forms 8027 for 2014. This due date applies only if you electronically file.

March 31 Wagering tax
File Form 730 and pay the tax on wagers accepted during February.

March 31 Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in February.

March 31 Electronic filing of Forms 1097, 1098, 1099, 3921, 3922, and W2G.
File Forms 1097, 1098, 1099, 3921, 3922, and W2G with the IRS. This due date applies only if you file electronically. Otherwise, see March 2. The due date for giving the recipient these forms generally remains February 2. View More Tax Dates