There are often the missed opportunities for business tax debt relief for small businesses in New Jersey which are often not explored due to lack of knowledge. So, here we are providing you some tips to maximize your business tax savings in NJ.
1. Claim your home office deduction
Small business owners who designate a space in their home for business use can reduce their business tax burden. This deduction can be calculated worth $5 times the square footage of your home office, copped at a maximum of $300 per square feet, means you can deduct up to $1500. Alternatively, you can also take into account utilities, property taxes and mortgage interest.
2. Business use of car
Keep careful records of all your car-related expenses incurred by you, based on actual expenses incurred, including gas, tires and repairs. You can use a miles tracking app to record how many miles you drove and where you drove to.
3. Trust fund monies
These are the monies that you need to pay the contractors, no matter how cash-strapped you are. Delay in paying their withholdings using those taxes may require the state or IRS to seize your personal property or business because that money isn’t yours to keep and utilize. If you are considering selling or merging your business, that requires a different tax deduction approach, and for this, you can contact the experienced small business advisors in New Jersey.
4. Pass-through taxation models
The new tax laws in NJ allow for 20% deduction for the qualified small business owners who make use of the pass-through taxation model, such as sole proprietorship and partnerships.
5. Consider hiring a family member
You may deduct the wages of your family member employed by you as a business expense. For example, your employed child under 21 can save you from paying under the Federal Unemployment Tax Act or FUTA on those wages. Your child need not do some important work, if they just come to the office and do some light, part-time work like cleaning around the office, you can potentially save a couple of thousand dollars of the highest tax bracket in NJ.
6. Deductions for the child
You can have a refundable credit of up to $1, 4000 of your child under 17, and collect that amount even if you owe no federal tax. The credit of up to $500 is also available for each qualifying and dependent, other than your child.
7. Hire the right local CPA in NJ
Your small business advisors in NJ should be able to do more than financial statements and taxes for you. If it’s all that they do, they are not the right tax prepares to hire. They should be able to ensure that you have no cash flow problem by monitoring your gross and net profits. So, hire them at the start of the financial year.
Matthews & Nulty Inc., the local business tax advisors in NJ can help in minimizing your small business tax returns. We offer expert level advice and services to small to mid-size businesses and non-profits on minimizing their business tax burden and help you in a variety of financial concerns, including making a major purchase or obtaining a business loan for your startup or mid-size enterprise.
Get in touch with Matthews & Nulty to have the peace of mind while filing your tax returns in NJ.
A piece of advice by Matthews & Nulty
When the amount due for a month covered by Form ST-51 is $500 or less, you need not file a monthly return, instead, the return for that month can be filed with next quarterly return. You need to file a monthly return even if no tax is due on your business for that quarter. New Jersey small business laws mandate that quarterly sales tax returns must be filed before on 11.59 p.m. of the 20th day of the month after the end of the filing period.