For Painting Contractors, It’s Always ‘Tax Time’

. But some year-end strategies can pay dividends now

Accountants, tax advisors and financial planners all agree that you should be mindful of your tax strategy throughout the year. This will help to reduce tax pressures and decrease your tax burden.

That said, there are year-end measures that can reduce your tax bill for this year and put you on a solid footing for the future. These are some ideas you can use to reduce your tax bill for the year.

Consider expert help. Do you know of any professional tax specialists? Although there is a cost to this service, it could be worth it if you’re not as proficient with tax law and calculators as you are with painting. Professionals can help you find deductions that you wouldn’t have discovered on your own. You can also focus your efforts on what you love, like landing new projects and painting.

Are you a tax DIYer? That’s cool, too. PROs with a PRO+ account have the ability to download all expenses and billing into Intuit QuickBooks. This program also has a tax preparation checklist that will help you stay organized throughout the year. QuickBooks offers a tax preparation program that will help you file taxes. PRO tip: Avoid procrastination. You’ll reduce stress later on by being organized with your billing and expenses.

Keep your receipts and track your mileage. COVID legislation has made deductions more complicated. For example, business lunches that were previously only deductible up to 50 percent can now be claimed 100 percent. 2021 allows mileage deductions up to 56 percent for trips between work sites or to Sherwin-Williams stores for supplies. You can save all invoices and receipts you receive from Sherwin Williams with your PRO+ account. Register now with your representative or log in to your PRO+ Account.

You want this sprayer, don’t you … It will increase your team’s efficiency, and allow you to explore new markets. You’ll be able to claim a federal tax deduction for equipment purchases if you purchase it or any other equipment before the end of the year. Equipment depreciation deductions for used and new equipment are available at a higher rate for equipment bought within the past four years. Consult a tax professional for details.

Consider a retirement plan. You have a variety of tax-deductible retirement plans for small businesses like painting contractors. These are both for you and your employees. Your tax burden will be reduced by opening a plan and contributing 2021 to it. It is always a good idea to plan for retirement, even if you are not a millennial.

How do you define your business model? Are you a sole proprietorship? A partnership? A limited liability company Do you want to become one? These questions could have an impact on how you tax and what deductions you can claim. For advice on how to structure your business, consult a tax professional.

Be charitable. Donations to charities in 2021, are now subject to higher levels deductibility, both for individuals and businesses. To take advantage of the current levels of cash contribution deductibility, consider making a contribution before the year ends.

Look into the possibility of paying back payroll taxes. Some Social Security payroll taxes incurred during 2020, were also deferred under the CARES Act. Employers will have to pay half the amount before the end 2021,, and half at the end 2022.. Talk to your tax professional to discuss the implications of these payments and how to best plan for them.

This article will provide an overview of the business decisions that can affect taxation for contractors who are painting. For more information about your taxes and business, please consult a tax professional.

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