Ho! Ho! Ho! How Much Will You Owe?
Hopefully nothing!! Tis the season to start preparing for next year’s tax return. Yes, it can be daunting, especially if you own a business. But help is available! This week on The Successful Soulopreneur Radio Show sponsored by Starshine Communities Kim Dyer of Keystone Capital Management Group joined me to ensure that you have a good understanding of the tax consequences of some of your decisions and some things that you may be able to adjust now, before you file.
- If you have ever been an employee, then you have seen on your check stub or W-2 the amounts withheld for social security and Medicare taxes.
- When you are self-employed, you are both the company and the employee; which means that you are responsible for paying both the employee and the business share of these taxes.
- If you have not been paying these taxes quarterly, be sure you have enough set aside to cover these when you file. Self-employment tax 12.4% + Medicare Tax 2.9%
Entertainment and Meal Costs
- Gone are the days when you can write off 100% of these expenses. At best, you may be able to write off 50%.
- Business meals with clients are 50% deductible and need to be well-documented with who, what, where and why plus have a receipt.
- While entertaining clients by paying for golf events or concert tickets is 0% deductible.
Charitable Contribution and Deductions
- A charitable contribution is money or items donated to 501c3 organizations in the tax year and reduces your taxable income.
- Unlike charitable contributions which have to be paid by 12/31/19, charitable deductions can be paid with your 2019 tax filing and reduce the amount of tax owed to the government.
- A charitable deduction is monies paid (up to $4800 per married couple) out of your income tax owed to state determined 501c3 organizations.
For more information about this deduction and to receive a list of state approved charitable organizations, click here to send an email to Kim. To learn more about 2019 tax implications for your business entity, click here to listen in to this week’s podcast.
Securities offered through J.W. Cole Financial, Inc. Member FINRA/SIPC. Advisory services through J. W. Cole Advisors, Inc. (“JWCA”). Keystone Capital Management Group, LLC and JWC/JWCA are unaffiliated entities.